Stock Advisor Resumes:Three unexpected methods to protect yourself from inflation

TFD – Discover the latest investment strategies and opportunities as Stock Advisor resumes, offering insights into alternative investments and inflation hedges.

For investors, the past few years have been both profitable and difficult. Almost every significant market sector has been affected by inflation, which has had negative effects on both consumers and businesses.

Even while inflation has dropped dramatically from its June 2022 top of 9.1%, the current rate of 3.5% is still higher than the Federal Reserve’s goal range, which is at 2%.

In fact, during the past year or so, investors have continued to make substantial gains. New developments in weight-loss therapies and artificial intelligence (AI) have fueled a surge in interest in the technology and pharmaceutical sectors.

Nonetheless, a number of asset groups that are not related to the stock market might benefit from increases in inflation. Even though some of the investments discussed in this article might seem paradoxical, they all represent tried-and-true methods of diversification as well as unique opportunities that might act as helpful inflation hedges.

1. Equity from private sources

Have you ever heard about a business that produces a fascinating or intriguing product, only to find out later that it is still privately held and you are not able to invest?

In general, most investors are not allowed to invest in private enterprises. Your capacity to make investments in private companies will be restricted until you reach the income or net worth requirements necessary to be considered an accredited investor.

However, you might be able to access private equity opportunities if you are an accredited investor. High-net-worth individuals form a syndicate and provide funding to private equity firms, which then makes investments on their behalf.

Private equity firms typically select a theme for their funds and make investments in start-ups that satisfy predetermined standards. The idea is that you will be introduced to a range of companies before they decide to go for an IPO or are bought out by a bigger rival.

If you’re not an accredited investor, you may consider investing in top start-ups like SpaceX, Stripe, Epic Games, and others through the Destiny Tech100 fund (NYSE: DXYZ).

Investing in private equity can yield significant profits, contingent on the timing of your allocation. Investing in small, unknown enterprises, sometimes run by first-time founders, carries a significant risk, but it also has a significant potential payoff.

2. Precious metals and artwork

Precious metals and fine art are two more categories of alternative investments. Now, chances are you won’t be among those who discover the next famous artist when they’re still relatively obscure unless you regularly visit galleries or trade shows. The truth is, you can make money from art without having to do that.

There are “blue-chip” names in the jewelry and art markets specifically, much like there are blue-chip companies. Notable artists that a huge number of people will be familiar with and enjoy account for some of the biggest rises in these asset types. You don’t have to find a needle in a haystack.

One method to invest in excellent art for those of us who don’t have the money to buy an entire Rothko or Picasso is through a website called Masterworks. Similar to a private equity firm, Masterworks raises money and invests it in the fine art industry, which is its target market.

Following the acquisition of an artwork, Masterworks securitizes the asset so that investors can buy fractional shares via its trading platform. Keith Haring, Andy Warhol, Banksy, and Jean Michel Basquiat are a few of the artists that are showcased on Masterworks.

Additionally, precious metals might act as an inflation hedge. To be more precise, some rare coins and even timepieces can fetch high prices. The primary cause of this is that jewelry and mint firms frequently stop making particular things after a while.

Similar to Masterworks, Rally gives investors access to a far wider range of asset types than just fine art. Fractional shares of vintage Rolex watches and coins from 18th-century seafaring excursions are available for purchase on Rally.

3. Antiques

Do you recall Beanie Babies? The sheer number of them I was given as gifts as a child growing up in the 1990s is astounding. I remember hearing from relatives to hang onto the stuffed animals because you never know when they might come in handy.

Even though I never made money off of my Beanie Babies, it’s interesting to talk about the marketing tactic that made the toys popular.

Beanie Babies were produced by Ty, a business that used inventive marketing strategies to sell its plush toys. Specifically, Ty created a sense of scarcity to tempt customers by manufacturing each new Beanie Baby in limited quantities and for a brief time before stopping production.

Trading cards are a perfect example of a scarce collection; chances are you have a handful of those hidden away in a cellar, attic, or closet.

Among the most sought-after collections are Magic: The Gathering cards, sports cards, and Pokemon cards. Furthermore, because these brands offer such a wide range of sets and collections, some trading cards are incredibly expensive because of their rarity and limited production. ..

Professional athletes‘ rookie cards, for instance, typically sell for hefty prices. There are only so many cards available for a first-year player since, well, you’re only a rookie once.

A rookie card of Mickey Mantle sold for more than $12 million just two years ago. The drawback? The card remained pristine. It’s astounding someone was able to take such good care of the card for so long, especially since it was made in 1952.

In the realm of trading cards, collectors have the option to send their products to be graded. These companies will store your cards in a slab, or plastic case, and grade them based on how well they’re in overall shape.

To put collectibles’ potential into perspective, keep in mind that eBay has acquired a few markets in the past two years. eBay paid over $300 million to acquire TCGplayer in 2022. And the business bought prestigious auction house Goldin at the beginning of this month.

In light of the aforementioned themes, now would be a good opportunity to give your attic storage containers a thorough cleaning. You may be unaware that you are sitting on a gold mine.

Adam Spatacco does not own any of the stocks that were discussed. The Motley Fool suggests eBay along with the following choices: brief $52.50 calls on eBay for July 2024. There is a disclosure policy at The Motley Fool.

As a partner of USA TODAY, The Motley Fool provides financial news, analysis, and commentary aimed at empowering readers to take charge of their financial destiny. Its material is created without USA TODAY’s involvement.

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