One current tidbit of conventional wisdom that we hear again and again about financial markets is that “there is no alternative.” Market watchers endlessly lament how unattractive valuations of traditional assets classes are today. Savings accounts pay nothing. Longer term treasury bonds pay a miserly interest rate between 1% and 2%. The dividend yield on the S&P currently hovers around a lowly 2%. But at the same time, our illustrious financial pundits claim you must buy these wildly overvalued assets anyway because what else are you going to do with your money? Bury it in the back yard? There is no alternative.
The bankers, stockbrokers and financial advisors of the world are smug. They have mastered their sales pitch over years, if not decades. They work for giant corporations staffed with armies of lawyers built with the prodigious fees they have skimmed from hard working, middle class people over the years. Your pensions fund, 401k, brokerage account and bank CD have all paid these good fellas their proverbial pound of flesh. That’s fine with these corrupt financial conmen. After all, what are you going to do? There is no alternative.
And their advice is terrible. Almost every single stock analyst has a buy rating on every stock he covers, even if some of them are obviously terrible investments. If a stock an analyst covers goes from $10 to $5 a share while the price target is $20, it isn’t a problem. Just change the new price target to $8 a share, maintain the buy rating on the stock and then claim it still has a whopping 60% upside potential. Wall Street has a short memory and hey, what are you going to do? There is no alternative.
By now it has become obvious to any thoughtful observer that the paper assets our financial overlords push cannot possible deliver the outrageously high returns they’ve promised. The markets are a long, long way from compounding reliably at 10% a year. This revelation doesn’t deter today’s strain of hardy financial thief of course. These criminals in Armani suits have grown fat and happy on their backdoor dealings with central banks and crooked politicians – all of whom are quite willing to “look the other way” when average people get “accidentally” screwed by some “unforeseen” financial crisis. “But what are you going to do?” chuckles your financial advisor softly. There is no alternative.
Normal, responsible people can’t stop saving for retirement, college, a house, a car or a rainy day just because the Fed has driven interest rates to zero. Life doesn’t stand still and so the financial predation continues. The big Wall Street banks know you need to save and invest your money somewhere and they don’t care whether you choose stocks, bonds or cash. They get their cut in any case. You, on the other hand, would have better odds going to Vegas and putting it all on black. At least then you would nearly have a 50-50 chance of doubling your money. It’s a sad day when a casino can give you a better return on your investment than Wall Street can. Somewhere an investment banker smiles while a Mafioso weeps. There is no alternative.
There is only one problem with this odious narrative. It is all an elaborate lie. Your banker, broker and financial advisor want you to think you have no alternative. They want you to think you are trapped in a Hobson’s choice – a situation where regardless of which asset class you choose – stocks, bonds or cash – they still win. But I’m here to tell you that there is a choice. An entire asset class exists that has been almost entirely overlooked by our financial illuminati. There is an alternative: investment grade art and antiques.
Nobility, wealthy industrialists and savvy connoisseurs have coveted, collected and treasured fine art and antiques for centuries. These masterpieces of human accomplishment are made from some of the rarest and most beautiful materials on earth – dazzling gemstones, glittering precious metals and exotic tropical hardwoods. They are imbued with both historical and cultural importance, showcasing the skills of a society’s greatest artists and craftsmen.
And, perhaps most importantly, they are priced reasonably. You can own an iconic World War II era mechanical chronograph wristwatch for just a few hundred dollars. An elaborately engraved bronze Japanese tsuba (sword guard) from an 18th century samurai sword can be purchased for less than $500. Jewel-like, medieval European hand-illuminated manuscript pages from the 15th century are readily available for $400 to $800 each. The possibilities are almost endless and as little as $100 is enough to start. While your banker, broker or financial advisor might insist otherwise, there is definitely an alternative for your investment dollar.
