Are investments in tangible assets crisis-proof?

Real estate: concrete gold is booming

Houses, condominiums and commercial real estate are still very popular forms of investment in this country, as confirmed by current statistics: With the”Financial investments used by Germans 2021” Real estate ranks first among tangible assets. At the time of the survey, 26 percent of respondents said they were investing in real estate — in 2019, this figure was 22.9 percent.

That too Transaction volume The German real estate investment market has grown rapidly in recent years. While only 21 billion euros were reached in 2004, the transaction volume of commercial and residential real estate in 2021 was already over 114 billion euros.

The reason for this is the sometimes rapid increases in the value of real estate — especially in major cities and particularly popular regions, such as Bavaria — from which investors have benefited in recent years: The Construction price index shows that prices for residential buildings rose by 29% in the period 2010 to 2020; the prices for building land rose by as much as 102% in the same period and Real estate in major cities They also gained three digits in value.

But: Direct real estate investments tie up a lot of liquidity for a long time. In other words, the money invested is literally “firmly cemented.” Investors should therefore first ask themselves how much capital they can spare and for how long, especially since there is a speculation period of ten years for properties used by third parties in Germany. Meanwhile, owners may benefit from rental income, but must also take rising interest rates, maintenance costs and potential rent losses into account in their overall bill.

In general, however, real estate as a capital investment represents a lasting value that no stock market earthquake or inflation can cause to disappear. Demand for housing is also expected to continue to grow as a result of population growth in Germany, meaning that a “real estate bubble” is relatively unlikely.

Investors who benefit from real estate market opportunities but do not want to tie up their capital in the long term can digitized real estate shares profit. They finance attractive real estate projects with the money of several investors. These include residential real estate or commercial properties in prime locations. Depending on the number of shares they have acquired, investors generate ongoing returns through rental income and the increase in value in the event of a sale. In addition, digital shares enable a diversified portfolio whose shares can be sold on the secondary market at any time.

Collectibles: Return on Rare

Fine wine, Classic Cars and art are among the most emotional investments. Fans can simultaneously indulge in their hobby with investments in wine, classic cars or paintings and hope for price increases.

However, only collectibles that are particularly rare and sought after act as inflation-protected investment objects that have a low correlation with the capital markets. For example, within ten years, certain classic cars can definitely three-digit value increases achieve. Fine Wine can also experience double-digit price increases per year, as the LIV-EX industry index shows: It reached a new high in 2021. According to the figures, the Liv-ex Fine Wine 100 Index by 20.83 percent, while the Dow Jones stock index rose by just 14.43 percent during this period and the gold market even fell by 3.82 percent.

However, even collector stocks do not generate current returns. The focus here is on the hoped-for, nominal increase in value, in which cycles and fashion trends also play a role. Because a very important aspect of price development in a collection area is how many financially strong interested parties there could be in the future.

Without the appropriate expertise, such an investment is therefore very speculative. It should also be noted that collectibles are not so easy to monetize again, as the number of potential buyers is limited and difficult to reach. In addition, running costs — such as for storing wine, the garage or maintaining classic cars — can be quite significant and reduce returns.

Diamonds: Brilliant views

Diamonds concentrate the highest value in a very small space and have been used to store value for thousands of years. The outlook for diamond investors has improved again in recent years for several reasons: Due to Closure of large mines and the natural limitation of diamond deposits Funding volumes are declining worldwide. At the same time, the interest of rich investors from Asia is increasing and is driving up the prices for precious diamonds at auctions. Accordingly, in 2021, the average prices for rough diamonds of around 21 percent on an annual basis after nine percent in 2020.

The same applies to top-class gemstones as investments: Due to their scarce supply and high demand, they are relatively crisis-proof and therefore offer good inflation protection. However, as direct investments, they require a great deal of expertise and a high level of investment capital, which remains tied up for the duration of the investment.

As with the other tangible assets mentioned above, it is therefore particularly suitable for portfolio diversification to invest in digital shares. This allows investors to benefit from the attractive market opportunities of alternative, comparatively crisis-resistant asset modules starting at just 500 euros, while remaining as flexible as possible.