The Holiday Spend: Shopping Assets PART 2

Last week, we delved into the idea of gifting appreciating assets like stocks, real estate, and insurance. This week, let us expand our horizons beyond these conventional choices. Remember, the goal is to build wealth and secure financial goals, not just for the holidays, but for a lifetime. Giving appreciating assets as gifts for yourself and others takes your plans to build wealth and extends it to this area of your life. It is a mindset shift that can turn a gift that could be quickly forgotten into a gift that will continue to grow in value and that can have a significant impact on you or your loved ones. Here are some appreciating assets that do not strictly fall into the conventional investment categories, but are worth thinking about when gifting this holiday season:

Unconventional Wealth: Assets with a Twist

•Fine Wine: Think beyond the casual bottles you uncork for an evening with friends. The world of fine wine investment is an exquisite realm of high value, insured bottles, carefully preserved in state-of-the-art storage facilities. However, entering this sophisticated market is not exclusive to the affluent anymore. Today, it is accessible to a broader audience, thanks to options listed on major stock exchanges like the New York Stock Exchange (NYSE) and NASDAQ. Another avenue is through mutual funds or exchange-traded funds (ETFs) that invest in a diversified portfolio of companies associated with wine production and distribution. These funds can offer a more balanced risk profile and are a practical option for those new to investing. While the global wine market might feel distant, technology and financial markets have bridged the gap, making it possible for Jamaicans to invest in this market, without the need for extensive capital or expertise.

•Fine Art: Purchasing art pieces can be about so much more than their visual appeal and decorating your home to make it feel inviting. Fine art stands as a strategic and resilient investment and has proven to hedge against inflation and market volatility. Historically, from 1995 to 2022, it has outperformed traditional markets, with contemporary art yielding an average return of 12.6 per cent surpassing the S&P 500’s 9.0 per cent. While the elite might flock to auction houses, galleries, or reputable dealers for high-profile purchases, another enriching path lies in supporting the burgeoning talent of local artists and art students. The Jamaican art scene is vibrant and full of promising artists whose works not only add a unique, personal touch to any space, but also hold potential for significant appreciation in value. Investing in these emerging talents is a chance to nurture the arts locally and possibly own a piece of the next big name in the art world. Imagine adorning your home or office with art that resonates on a personal level, all while knowing your investment supports the growth and recognition of local talent and is also building your wealth. It is a good blend of financial foresight and aesthetic refinement.

When you think of investing fine art one usually thinks purchasing through auction houses, galleries, or reputable dealers, with the artwork’s value tied to the artist’s renown, quality, and rarity, the type of activity that is the purview of the wealthy. However, there are more accessible entry points into this market, prints from acclaimed artists emerge as a practical option, offering a blend of aesthetic appeal and potential financial growth. Accessibly priced prints, especially from renowned artists who are masters of both canvas and printmaking, offer a gateway to owning a slice of artistic prestige. Think of prints by icons like Andy Warhol or Banksy — these aren’t just pieces of art; they’re potential goldmines in the art investment landscape.

•Investing in You: The Ultimate Asset: Although often overlooked, you are an appreciating asset that you can invest money in this holiday season. Sounds strange? Your skills and competencies are what economists refer to as your human capital and it is the most valuable asset you will likely ever own over your lifetime. It enables you to earn a steady stream of income over your life that you can use to acquire financial assets. Therefore, investing to improve your skills is an often-overlooked gift you can give yourself. Let us say you cannot yet invest in the appreciating assets we have already discussed; you can provide yourself with the tools to someday be able to. This could mean enhancing your qualifications through education, which not only boosts your income-earning potential, but also paves the way for future investments in other assets. You can go back to school to become better qualified in your existing field or learn new, perhaps more relevant skills. Thanks to online teaching and learning platforms, you can build your competencies and skills at a fraction of the cost of a traditional university. There are even short courses on these online platforms that cost money that you would typically spend on parties or weekend trips with friends. You can also develop skills that may serve as side hustles now but have the potential to provide primary income as a small business. This Christmas, be the gift that keeps on giving back by investing in yourself.

As we wrap up our holiday exploration of gifting appreciating assets, let us circle back to where we began. Let us break the mould of conventional gifting and step into the realm of lasting value. Instead of the usual glittering trinkets and fleeting pleasures, why not gift a slice of prosperity? Imagine the joy in gifting shares of a promising business, a stake in a real estate fund, or even a life insurance policy. And let us not forget the unconventional yet intriguing avenues of fine wine and art, each with its own story and potential for appreciation. You could also think beyond the usual presents and invest in your own potential and watch your personal prosperity flourish. These are not just gifts; they are seeds of financial freedom and security. Envision a future where your holiday gifts blossom into assets that keep on giving, year after year. This holiday season, let us gift thoughtfully, invest wisely, and spread the joy of prosperity. Happy holidays! As always when investing, the expertise of a trusted financial advisor is invaluable.

Nadine Thomas, assistant vice-president – Private Wealth, NCB Capital Markets Limited (Photo: Paul Mullings)