“We found that whiskey outperforms stocks and bonds by a huge amount. So, on average, we find that you have 17% of an annual return [and] in a comparable period for stocks that it’s 10%. Baseball cards were also an asset class that actually outperformed those traditional ones. Wine came at number three, which had an average return of about 10%.”
There are three main categories of collectables that function as investments, Verdickt says.
“You have what we call drinkables, which is wine and whiskey. You have wearables, which are watches, handbags, and jewellery, and then you have the broader theme of collectables, which is art, stamps, Lego, vintage cars, for instance.
But before you cash in your shares and buy whiskey or handbags, Verdickt warns there are drawbacks to investing in collectables.
“If you want to sell your stocks tomorrow, for instance, not a single problem, just the stock exchange has to be open, you will find a willing buyer.
“For whiskey, there’s not an event every single day where you can sell your whiskey. So, if you want to have cash today, whiskey is not the asset you want.”
Collectables also don’t return a dividend, but they do have other benefits.
“The fact that they are tangible does have specific value, and we call that an emotional dividend,” Verdickt says.
And if you use the handbag, or play with the Lego, Verdickt says it can still be an investment.
“The value will be higher if it’s in perfect condition, but it doesn’t go to zero if it’s not”.
Listen to the full episode of The Prosperity Project for more on the investing power of collectables.
The podcast is hosted by Nadine Higgins, an experienced broadcaster and a financial adviser at Enable Me.
You can follow the podcast at iHeartRadio, Apple Podcasts, Spotify, or wherever you get your podcasts. New episodes are released every Monday.