Traditional investors consider passion investing as a non-serious or even rather a nonsensical investment— because it’s largely allocating wealth toward passionate high-value collectibles. Passion investing has been around for at least 10 years and is now seriously expanding into the classic car arena.
New Trends and Profit Seeking Investors
Recently, classic cars are gaining attention because of approximate 500 percent returns over investment over the past decade alone, which has outpaced wine and art by more than a hundred percent. “Passion funds,” known for investments in largely art portfolios, have been around since the year 2006, with classic car funds debuting on the scene about five years ago.
About ten years ago, classic cars were generally looked at as collectibles, however people are now recognizing them as an asset class and are investing in them passionately.
The basic difference between a fund and a collectible is that the former has a group or a person that usually comes up with the specific terms and structure and offers those directly, whereas the latter is when a group of people come together collectively and decide on the terms.
Under the Radar and Still Rocking
Car funds generally keep a very low profile, while raising the funds through their own network and registered broker-dealers. The primary reason for staying low is to not alert the marketplace about your next move. Car dealerships will want top returns if you advertise or market what you have in your collection and buyers would prefer to get these rarities from other collectors, and not funds or investors. That theory is precisely how passion marketing works! You don’t want to buy an item you are passionate about from someone who just considers the transaction as a means of trade and profit.
In the past three to five years, the sheer volume of global purchases of classic automobiles and shipments has literally exploded which is primarily driven by new investors, or traders as opposed to casual collectors.
Investors are actively inquiring about classic automobiles a lot these days, there is a need to offer and develop a unique and diversified portfolio product. However, investing only in one car and sitting on it to find a better deal to trade it for another one making a profit is as lame and the same as investing in stock options – the key to success is being creative with your commerce opportunities!