Fra Zerohedge:
It appears that the world’s central-scammers have finally gone too far. In a shockingly Zero-Hedge-ian statement, Reuters is forced to admit that “spooked by the end of a 30-year bond bull run and bouts of money printing which have pushed stock values out of kilter with economic reality,” high-profile investors are turning their backs on financial assets andfavoring real assets.
Of course, all it took was 7 years of unprecedented monetary policy experimentation to decouple the fantasy of equity markets from the harsh reality of the real economy…
But, as Reuters explains, alternative investments such as a Ferrari 335 S Scaglietti, a rare blue diamond or a case of Romanee-Conti Grand Cru wine from Burgundy are going mainstream as investors grapple with ultra-low interest rates and volatile stocks.
Rare coins, collectible jewelry and classic cars join fine wine among the top performersin the year to end-March…
And fine wine saw its largest positive monthly movement since 2010 in July with the Liv-ex Fine Wine Investables index, which tracks around 200 Bordeaux red wines from 24 leading producers, up by 4.5 percent. It is up 13.8 percent so far this year, compared with 6.9 percent for the S&P 500 and 8.9 percent for the FTSE 100.
“As a physical asset, fine wine tends to perform well in periods of uncertainty…and is also not linked to the prices of other assets in most circumstances,” said Andrew della Casa, Founding Director of The Wine Investment Fund.
Over a five-year period, cars, coins and jewelry returned 161 percent, 73 percent and 63 percent respectively, eclipsing Britain’s FTSE-100 stock index, which was up 15 percent since the start of 2011.
But with future demand tough to call, Andrew Shirley, author of the Knight Frank Wealth Report, strikes a note of caution.
“You should still only be buying the investments of passion that you will enjoy owning and will give you pleasure even if their value goes down – there is certainly no guarantee that values will continue to rise.
“There is an argument that such investments add diversity to portfolios, provide a hedge against inflation, and unlike equity-based investments, offer a degree of tangibility but like gold they tend not to generate any income and can also be illiquid, and subject to changes in taste and fashion.”
Gold, another so-called safe haven from top-of-the cycle bonds and expensive stocks, is also enjoying a purple patch, BlackRock research shows.
With returns up 26.8% year-to-date – its best year since 1979 – gold has returned almost twice as much as higher-risk emerging market dollar bonds and non-U.S. Developed market bonds, and almost five times a 3.1 percent return on U.S. large caps, it said.
Analysts at Unigestion describe the gold price rise as a “classic” market response to stress triggered by Britain’s shock decision to quit the European Union and fears of negative rates but it was difficult to predict how long these circumstances supporting a rush into gold might last.
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So with yields at record lows and stocks at record highs, the world is waking up to the reality that financial assets are nothing but smoke-and-mirrors, blown and reflected by central planners’ manipulation to keep the confidence alive. The problem is, the elites are stepping away, leaving the greatest fools to fight over the last morsels of ‘easy’ money before the inevitable new-world-order-ushering plunge occurs.
