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Wide World of Investing


Investors could be forgiven for walking away from the stock market at just about any time in the past decade, and venturing instead into alternative investments with higher returns.

A sample of gold bars, coins and jewelry recovered from the $450 million treasure cache discovered on the Atocha shipwreck.
Source: Mel Fisher's Treasures
A sample of gold bars, coins and jewelry recovered from the $450 million treasure cache discovered on the Atocha shipwreck.

Long-term investors have not been rewarded for their risk tolerance or patience. Whether it's one-year, three-year, five-year, or 10-year measures, the results are hardly encouraging.

Over 10 years, the S&P 500is up just over 10 percent, or about one percent a year. On a five-year basis, it's down about 18 percent.

Now, how about gold or silver, perhaps the most popular and accessible alternative investments?

Spot gold went from $300 an ounce in 2001 to almost $1,890 in September, before retreating to the $1,700 range. During the same period,silver priceswent from $4 an ounce to almost $50 an ounce. It dropped to $30 an ounce, but is now back around $32 an ounce.

Back-of-the-envelope math is enough to show you that gold's gain was six-fold and silver's was 10-fold.

Equally impressive has been the 10-year run of the Mei Moses Fine Art Index, which edged out the S&P 500. More recently, it was up 16.6 percent in 2010, and has since gained another four percent as of Sept. 1.

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Now, some may say selecting art is harder than picking stocks, while others would say the converse is true, but there's little disagreement that the former dresses up a wall better than a securities certificate.

How about vintage autos? Auctioneer Gooding & Co. had 37 sales with record prices in its 2011 year, which ended in September, selling 27 cars at values greater than $1 million. For the more "average" vehicle, the average price was seven percent higher than a year ago and 22 percent more than in 2006.

Of course, vehicles and art — like other collectibles such as wine and horses — are not immune to price declines, big or small. Fortunes can be lost as well as made.

Many say that the current real estate marketis a once in a lifetime opportunity — for investors in many income brackets. In many areas, residential properties are selling at a 40 percent discount to peak prices of just a few years ago. And with interest rates at a record low, carrying costs on a rental property make an even more affordable investment.

The point is that there are other ways to invest your money, without having to understand the mechanics and implications of a Flash Crash or QE2.

Alternative investing may not be for everyone, but there's an entry point for almost anyone, and as popular cable TV programs illustrate every week, small fortunes — and the corner stones of collections — can be found in attics, basements and, yes, storage rooms.

So, take a tour of our special section, even if it's just to window shop.

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Alternative Investing 2012