From fashion to diamonds, wine to art, Stylist reveals the savviest ways to invest your cash as part of our Make The Most Of Your Assets feature.
What is it? Buying a vintage bottle for investment takes knowledge, patience and exactly the right storage conditions (learn more by reading Liquid Assets: Uncorking Profits In Today’s Global Wine Market by David Sokolin and Alexandra Bruce). If this sounds like too much effort, buy into a wine fund such as Wine Asset Managers (WAM; wamllp.com). They will put your money into the right vines for you.
How much could you make? The Fine Wine Fund has made 14% a year on average since it launched in 2006. So an annual £9,000 investment would make around £1,260.
What’s the risk? A high risk – wine is a product which can deteriorate and is affected by trends.
What is it? Like a slice of Laura Ashley or Thomas Cook? These major companies are known as “blue-chip” because they are solid and reliable, make up the FTSE 100 index (100 biggest UK companies on the stock market) and pay large and regular dividends to shareholders. FTSE 100 shares are different from a tracker fund as you can choose to buy individual shares in 10 or 20 companies that you really like, rather than opt for the whole package. You can buy individual shares through a broker like TD Waterhouse and do research online at Trustnet (trustnet.com).
How much could you make? On average these make 5% to 10% a year, meaning a £9,000 yearly investment would make roughly between £450 and £900.
What’s the risk? High risk, as share prices can fall as well as rise. These are best seen as medium-term investments, of around five years.
Emerging market funds
What is it? A way of benefiting from the growing economy in developing countries such as China, India or Brazil. You can invest in these growing markets by buying government bond funds, corporate bond funds or managed funds. Buy through a fund supermarket such as fundsnetwork.co.uk.
How much could you make? The Aberdeen Emerging Markets fund is a collective fund which has returned 13% over the last year. This is around the average at the moment, but with the expansion of China into luxury goods and infrastructure, this could potentially rise much higher.
What’s the risk? High risk, but potential high return; these are countries with some serious growth ahead of them.