Liquidity of alternative investments | My Financial Review - comments on investment in currencies, stocks, bonds and gold
My Financial Review: Liquidity of alternative investments
This is an English extract from my other blog available at http://przeglad-finansowy.blogspot.com

Saturday, July 3, 2010

Liquidity of alternative investments

Since we elaborate on the investment diamonds the subject shall be taken more comprehensively. One of the important aspects of any investment is to be able to recover the capital invested in it. It is therefore notable that alternative investments are characterized by generally lower levels of liquidity than traditional.  This lower level of liquidity is due to the fact that either the markets for the assets are shallow, or there is limited number of buyers, or they are governed by specific laws.

In the case of works of art it can be said that a rapid sale at an attractive price is rather excluded. You can leave your work at the auction, but these are organized on the dates indicated and the more it is worth the smaller the number of potential buyers. Any sale by the gallery or antique shop is also associated with the expectations of the purchaser and the commissions.

Real estate market is much more liquid, but also here (especially in times of crisis)  the sale may take several months and may not always be able to get us a satisfactory price.

As to whether the philatelic or numismatic values there is quite a wide market for such items.They can be sold on auction sites or in specialist shops. Auctions are a quick and usually the number of transactions concluded there guaranteed to sell your item. However, the more expensive item the longer we will have to wait for the buyer. In turn, shops can take items to consign or buy, but often money they are offered less attractive than at auction.

Therefore, when planning to make investments in alternative assets or markets should be considered for rapid exit and liquidate our assets.