All assets go up and down in the short run. Over time, however, some assets appreciate continually. Others not so much.
So, if you want to get rich trading, find an extremely volatile asset and try to time a buy at the lows, and time your sale at the highs. Easy peasy. Just ask Baron Rothschild, or George Soros. Or Jim Drukenmiller. Or.... well, after that the list falls off fairly sharply. There are a few others on it. A very few others.
If you're more the ordinary sort, a good idea is to buy an asset that appreciates over time. Preferably something towards which you have some sort of emotional affinity. And buy it as an investment, not a trade.
So what are the qualities of something that appreciates over time?
Aristotle pretty much set the standard for this analasys when he determined the values for that which ought to serve as money itself. Coincidentally these values were all possessed by Gold.
A) It must not fade, corrode, or change through time. Obviously. Because if you buy it in perfect condition and want to sell it many years later in a distressed condition, it will fetch a lower price.
A diamond, for example fits this bill. A gold coin or medallion. A Statue made of bronze may take a little caring but should be easily maintained. What about Real Estate? Some buildings survive hundreds of years with a little care in excellent condition You probably don't want to be in a flood zone, or a Tornado zone or in a forest given to fires. But the right place built the right way could be okay. Like the Acropolis for example. Or Augustus apartement on top of the Palatine Hill in Rome has survived quite nicely for 2000 years. I don't think it's for sale. But if it were, it would be a really good buy. What about a Rare Book or manuscript, or tablet or painting? THese might take enormous care to preserve properly. But with that care atheir value could be superb over time.
B) It must be portable. Again, diamond, gold coin or medalllion. A small statue of bronze. A book. A smallish painting. Real Estate? not portable. Doesn't mean it can't be a good investment. But in time of War for example, you may have to flee. Then it is worthless. That's why portable is important - because anything bound to a place can be subject to confiscation by authorities. That which is portable is also easily hidden.
C) To be money it must be divisible for obvious reasons. As an investment, we must amend that. We should say rather it must be convertible.
In other words it's appeal must run across cultures - so that it can be convertible into local currencies across the globe. Obviously a Greek Gold coin might be worth more to a Greek than a Roman, But then again, it might not. Greek History is all of Western History. And it extends and overlaps with Middle Eastern History and Indian History. And funny enough - many Asians are fascinated by Greek History. So your object must have appeal across cultures in order to to have true appreciation because the prevailing cultures change over time.
D) It must have Intrinsic Value. This should be obvious. Though hard to define. Things relating to important Historical Characters and Events for example. Things pertaining to King Solomon, or Julius Caesar, or the Buddha, or Napoleon, or William Shakespeare, or Lau Tzu or John Lennon, or the Magna Carta or the American Revolution or the fall of Jerusalem or the ... Well, you get the idea. This is subjective. But history itself bears out its favorite sons, daughters and events. And beauty tends to be cross cultural. Truly amazing craftsmanship, Remarkeable originality and execution. Applied skill. These can recognized by trained eyes everywhere,
These then are the values you must consider. But even then a few other questions must be asked"
1) How many of the item are available - and how readily available. Something that meets all this criteria but is available in such numbers that is is quite common - may not appreciate quite so much over time. It will be subject to peaks and valleys that could be quite steep. Take, for example a gold stater of Alexander the Great. These were minted originally in what must have been the hundreds of thousands. Many of which still exist today. Many are still buried - but will be eventually dug up. It's a good investment still. And in one respect its sheer number is advantage because more collectors will exist which makes it more convertible. KInd of like a Gold Eagle from the US mint. There are a lot out there. But so are there a lot of folks colecting them which makes converting them very easy,
But perhaps not as good an ultimate investment as the gold medallion of Alexander in the Walter Art museum which is unique. (pictured above). That can be owned by only one person or institution. And it would take some time to find a buyer. But finding a buyer would be pretty easy. And they would pay a fortune.
2) How many substantially similar items are available that might serve to divert investor fascination? If you want a Guttenberg Bible probably nothig else will do. Or a copy of the declaration of Independence. Or a drawing by Da Vinci. Or the Gold Medallion of Alexander referenced above. If you want a beautiful Silver Dollar from the Carson City mint from 1883, maybe one from 1881 would do just as well. So how valuable is the 1883? It has value. But not nearly as much as the 1879 Pattern Schoolgirl silver dollar. You get the idea.
3) Finally how easy are they to fake? Anything can be forged, copied, reissued etc. Many items you can collect will have to be authenticated by accepted experts. This is not a foolproof guarantee of originality - but it is most often a fool proof guarantee that it will be accepted by the prevailing market as genuine - and that's good enough. So buy things that have been authenticated. And authenticated objects with well accepted provenance are even better. Why take the risk?
With these things in mind, go out and find your appreciating investments. It's fun and profitable.
It's intersesting to me that the most obvious class of object to persue is the Gold Medallion issued to comemmorate an important historical event. This touches every base. That's why I like them so much. But choose your own.
It will be safest, however if whatever you choose meets all the criteria above.
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