DIANE HARRISON

SOME ASSETS ARE HARD TO IGNORE

http://allaboutalpha.com/blog/2015/04/23/s
ome-assets-are-hard-to-ignore/

SOME ASSETS ARE HARD TO IGNORE

nvestors are always in search of that failsafe investment option, the one that offers the perfect hedge against whatever risk
du jour poses a threat. Even though conventional wisdom suggests there is no such animal, the quest continues, and
periodically one category or another finds itself leading the charge in general interest. Currently at bat in this popularity
contest is the category of hard assets, a broad swath of investment options that appear to offer some protection against the
general inflationary and economic fragility fears at work in the markets today.
Yet most investors feel uncomfortable investing personally in specialty segments. With renewed interest in these alternative
alternatives, niche managers who can provide skilled access are creating funds that answer these specific needs. Investors can
choose to own the hard assets themselves if they feel knowledgeable enough to do so, or participate through a comingled fund
vehicle, or perhaps invest with a combination of both.
GROWTH EQUALS STRESS
Population growth and a burgeoning middle class worldwide have added increased pressure on the planet's natural resources.
Foodstuffs to feed the global population, industrial materials to build infrastructure, and energy resources to meet electricity and
transportation requirements all increase the pressure on todays supply and demand balance. Combine this with the long-term
detrimental impact of the global financial crisis, which at this point seems more like a global status quo, and investors have good
reason to be wary of risk in many forms.
Inflation fears lead the way in investors minds as one of the major potential threats to many traditional investment holdings they
own or might add to their portfolios. Zerohedge.com succinctly stated in its 2015 outlook: The narrative that the U.S. is
tightening continues to be a false one one heard for many years now. Any meaningful increase in U.S. interest rates would
likely severely impact already stretched and stressed asset markets and plunge the U.S. and the world into a depression. As the
following chart shows, the US has basically held rates at near-zero since 2008 and, although verbal indications from the Fed
allude to stepping rates back up, actions speak louder than words.

Source: Rba.gov.au
PANEGYRIC MARKETING| APRIL 2015

DIANE HARRISON

SOME ASSETS ARE HARD TO IGNORE

ANGST ASSETS: 5 OPTIONS TO CONSIDER ADDING TO YOUR PORTFOLIO

With uncertain global markets dictating a growing need for specialty or niche assets to provide some measure of diversification,
Doomsday prophets would recommend looking at the options available through hard assets. So what makes hard assets
attractive? Beyond their non correlated valuation versus traditional assets, hard assets have the additional benefit of holding
intrinsic value due to the limited nature of their supply. Investors fearful of widespread market downturns and volatility might find
the specialty focus and rarefied universe of some hard assets an attractive component to add to their overall portfolio. These
choices can be tailored to match personal interests as well as investment objectives.
The guns-n-gold crowd is likely to stockpile precious metals and antique guns. Homesteaders will look to farmland, food
commodities, and other easily traded assets such as precious metals. And the more esoteric investors might look to the options
offered through antique cars, fine wines, rare art, and stamps or coins. The following offers a brief introduction to several of the
more popular categories of hard assets, courtesy of Commodity HQ (Doomsday Special 7 Hard Asset Investments You Can
Hold In Your Hand).
ONEPRECIOUS METALS (PARTICULARLY GOLD, SILVER, AND PLATINUM)

Gold: Gold prices currently hover around $1,200/troy ounce. Owning gold bars, coins, and jewelry means that the value of
the assets you can hold in your hand will move in unison with spot gold pricing. This inherent hedge against inflation
allows investors to avoid the nuances of futures contracts as well as settling for indirect equity exposure through mining
companies.

Silver: The price of silver is impacted by a variety of factors which are closely tied to the economic cycle. Used in both
commercial applications and well as for jewelry production means that its demand is broad-based but closely aligned with
global market trends.

Platinum: Used mainly as an industrial resource, platinums demand stems primarily from the automobile and electronics
industries. The production of this metal is heavily concentrated in emerging nations, making platinum prone to frequent
price spikes.

TWOANTIQUE GUNS: Purchases of guns, both commercial and collectible, have been steadily on the rise in recent years.
Demand in the US has been fueled by growing fears of tightening gun-control laws. Any further indications of such regulatory
restrictions would likely spark a drastic increase in the value of certain guns, as they are commodities with fairly fixed supply
levels.
THREESTAMPS: Similar to art, rare coins, fine wines, and other collectibles, stamps derive their worth from the investment
community that deems them valuable for purchase and trade. Simply put, stamps are a non-productive, collectible asset, much
like gold bars and silver coins, but with a more narrowly-defined universe of buyers and sellers.
FOURFARMLAND: Rising populations in booming emerging markets across Asia and Latin America are driving food demand.
With land in general a finite resource and farmland even more so, prices for producing acreage at home and abroad have
appreciated greatly in response to the growth in agribusiness struggling to meet the needs of an expanding world population.
PANEGYRIC MARKETING| APRIL 2015

DIANE HARRISON

SOME ASSETS ARE HARD TO IGNORE

FIVECLASSIC CARS: Classic cars, which include both antique models and selective later editions, are strikingly similar to
collectible guns in their market; both are luxury goods which can also be used for personal enjoyment. This collectible category
is more volatile in nature than gold and prone to wide fluctuations in popularity demand. However, certain segments of the
classic car market can outperform many of the other hard asset segments, as prices move in reaction to collector sentiment and
are severely constrained by limited supply.
MAKING A HARD CHOICE
Investing is part science, part sentiment, and part luck. You can be right. You can be wrong. More likely you will be both.
Though predicting when each phase will occur is an exercise in futility, hard assets can help to mitigate the travel between these
states.

Diane Harrison is principal and owner of Panegyric

Marketing, a strategic marketing communications firm founded in
2002 and specializing in a wide range of writing services within
the alternative assets sector. She has over 20 years of expertise
in hedge fund marketing, investor relations, sales collateral, and a
variety of thought leadership deliverables. In 2015, Panegyric Marketing received AIs awards for Best Financial Services Marketing &
Communications Firm and Business Excellence in Strategy & Positioning Statements USA, as well as M&A's Excellence in Financial
Services Marketing USA. The firm also won consecutive year awards in 2013-14 as IHFAs Innovative Marketing Firm of the Year and
AIs Marketing Communications Firm of the Year- USA. A published author and speaker, Ms. Harrisons work has appeared in many
industry publications, both in print and on-line.
Contact: dharrison@panegyricmarketing.com or visit www.panegyricmarketing.com.

PANEGYRIC MARKETING| APRIL 2015