Today there are more ways to invest your money than ever before. Alternative investments can help provide counterweights to more common investments.
Historical documents are important pieces of cultural memorabilia that are sought after by personal collectors, museums and universities. Given the prestige of the collectors, historical documents can go for top dollar. In one recent example, Bill Gates purchased the Codex Leicester for over $30 million.
Historical documents can be a great addition to any portfolio, but one word of caution: authenticity is critical. Far too many investors have been bamboozled by counterfeit documents. Raab Collection, an internationally recognized proprietor of historical documents, stresses the importance of due diligence. When they help clients such as the Library of Congress build their collections, every step possible is taken to authenticate a document before striking a deal.
Here are four other factors that should be considered before making your first historical document investment:
Plan for Preservation
The older historical documents get the more valuable they become – as long as they are properly preserved. The condition of the document is second only to authenticity when it comes to value.
Before you take ownership of a historical document, it’s a good idea to have a plan in place for how the document will be stored. Documents should be kept in waterproof, airtight containers that protect the fibers from the elements. UV radiation can also degrade paper overtime, which is why storing historic documents out of direct sunlight is always advised.
Protecting Your Investment
Unlike stocks and mutual funds, physical assets can be destroyed or stolen. Historical documents have to be treated like fine art. They should be insured and some form of theft protection should be put in place. Documents can be stored in a fireproof lockbox and/or stored in a bank safe under lock and key.
Get Documents Appraised
Professional appraisals are important for historical collectables. An appraisal will give you an official estimate of the value, which can be used for securing insurance. Appraisals also give you a better idea of an acceptable price when it comes time to sell off your investment.
Keep Track of the Market and Trends
You won’t be checking stats daily like the stock market, but keeping up with historical document sales is needed to ensure you make the best decisions for your investment. After all, making money on investments hinges on knowing when to buy and when to sell. Knowing what’s happening in the market will help you determine when the time is ripe to sell or whether you should hold onto your asset a little longer. Demand for historical documents tends to be higher than supply, but catching things right when interest is trending upward can help you make the most profit possible.
Historical and autographed documents have always been popular collectibles, but now more people are beginning to realize their investment potential. Every year countless documents are sold privately and at auction for thousands and even millions of dollars. Investors that seek professional guidance before buying and take care to preserve their asset will be able to grow their portfolio or retirement nest egg by simply holding on to a piece of history.
In general alternative investments (historical documents, art, coins, collectibles etc.) should make up a small portion, under 5%, of an investment portfolio. Another investment that isn’t quite normal, but isn’t really considered a normal investment either is peer to peer loans. We have written about peer to peer loans several times on this blog recently, I would consider under 5% for peer to peer loans acceptable but would consider that part of the bond portion of a portfolio.