When Asset Prices are Frothy, What Do You Buy?

As a person who used to work in wealth management, I still tend to spend a lot of time thinking about investments.

During the height of Covid (I'm talking April 2020 although maybe the height of Covid is now 😷), I was surprised at how quickly stock prices returned to normal and then to higher highs when around me I saw layoffs, lines at the church food bank, and fear.

Even with the continued boom in the stock market as well as other asset classes like cryptocurrencies, I haven't touched my stock investments but I'm wary to invest more cash into what feels like a broken system. Some say that the increasing prices of risk assets reflect questionable monetary policy in which those assets become addicted to QE money. Others believe the these markets aren't truly valuing the health of the economy but really a select set of elite companies that few, everyday people benefit from.

After listening to the episodes Vintage as an Investment and Bitcoin's Relationship with Financial Markets, from two podcasts with very different subject matter, my brain started wondering what people invest in when the "go-to" investments are no longer attractive.

Vintage 9k Yellow Gold Engraved "Horseshoe" Earrings

In an anecdote from the My Best Vintage Life Podcast episode mentioned above, Bridget and Art describe a rise in client interest of investing in tangible items during the Covid era, like vintage watches and premium vintage denim. 

If vintage jewelry is more your style, check out the price of gold, which peaked recently in August 2020. Gold, a store of value compared to something like dollars that can be printed in times of economic distress, is considered an investment safe haven.

Of the people investing their hard-earned money in vintage and antique jewelry, what percent are interested in the value of the item as a whole (aka the rarity of the piece) vs. the value of the raw materials such as gold and precious stones?

When I took a poll on Instagram asking this exact question, 69% of people said "the rarity of the piece" is what is responsible for an item's appreciation vs. the 31% who said "the value of raw parts". 

In addition, 75% of people said they included their vintage and antique jewelry as part of their net worth while the remaining percent chose not to count these physical assets and saw them more as purchases.

What are you investing in?

Let me know in the comment section below or over on The Keeper of Things Instagram account!