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Unusual investments 'unwise' in unstable market - 15/01/2008

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Investing in "unusual" markets, such as wine or antiques, can be a gamble when financial markets are unstable, an expert from Bloomsbury has warned.

According to Jason Butler, unusual investments are not the solution in a difficult market and should be purchased by buyers for their own personal enjoyment rather than for financial gain. Fine wine witnessed a sharp rise in value during 2007 of 39 per cent, ahead of gold and just behind oil, Decanter reports.

Mr Butler, a partner with Bloomsbury Financial Planning, claims that "when you've got difficult markets, that's when you need a disciplined allocations policy that reflects the fundamentals of capitalism", based on the acceptance that the value of investments can fall as well as rise.

"Don't confuse enjoying assets which may or may not go up in value with investments which are liquid traded; you're not comparing apples with apples," he explained. "You can't go sawing off the leg of a table and cash it in in difficult times, can you?"

Mr Butler pointed to national savings and investments certificates as a "risk-free" investment that guarantees returns, as they earn a set rate of interest over a fixed period of time and are not subject to UK income tax and capital gains tax.

© Adfero

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