10 Reasonably Safe Alternative Investments



Fine art can be a good investment because, historically, the price fluctuations in the art market don't reflect the ups and downs of traditional stock and bonds. During the second half of the 20th century, the value of art (based on the Mei Moses Fine Art Index), steadily increased at an average of 10.5 percent annually [source: Gross]. However, while the stock market and the art market don't usually peak and fall at the same time, art still experiences its own shifts that can make investing risky. For example, fine art sales boomed during the late 1980s due to a surge in investment from Japanese investors, and again in the mid-2000s [source: Woliver]. But even the thriving art market couldn't escape the 2008 global financial meltdown, though. The market has experienced a serious slump in the two years following, as well [source: Johansmeyer].

To buy paintings or sculptures in some of the top galleries and auction houses, investors should start with at least $10,000 [source: Johansmeyer]. But buyers can enter the market with much smaller amounts (closer to $500 or $1,000) if they are willing to take a gamble on smaller, undiscovered artists, or on less expensive media like photography and lithography [source: Woliver]. Of course, the big advantage of art as an investment is that as long as you buy what you appreciate, you can always just enjoy it for its beauty, even if you don't see big financial returns.

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