An unusual battle perhaps but a thought has just occured to me... At this time of year I usually top up the pension fund, which of late has performed particularly badly.
Here's the thought; instead of putting it all into a pension fund, is there a possible argument for buying a classic Ferrari with a view to selling it again in 3 - 5 years at a profit (or at least a reasonable chance of not loosing money)?
Criteria would have to be as follows ;
Age: 1980 or pre 1980 as I could import to Ireland for zero tax and thus re-sell back into the UK (as this would be the most likely market to purchase from and sell to) when the time came.
Budget: Max STG £25,000
Car: Possibly 308, or any other suggestion, preferably Ferrari.
Logic: Head should rule heart on this one, but at the same time it's a car that I would drive (occassionally) and would have to "like".
Any thoughts, or am I barking to even think such an "investment" could exist at £20 - 25K?
Interesting thought. However, though I didn't do the math and market research properly, I'ld hazard a guess that this would likely not be your best possible investment (notwithstanding the fact that I grant you that the stock market has seen better days as well):
a. The underlying asset is likely to 'erode' physically: you'll drive the car, so there is an inherent risk of damaging it, upping the mileage, increasing the wear, etc. Then again, storing it instead is not a great option either: a Ferrari needs to be driven to keep in shape;
b. Appreciation is far from guaranteed: esp. for affordable classics like 308/328/etc. There were quite a few made; already nowadays they attract a fairly limited group of buyers (quite a few people do like Ferrari, but prefer newer/faster); it might just be that the group with the strongest buying motives (guys like me, born between roughly 1960 and 1975, who grew up thinking '80s Ferraris were 'da bomb') will fade out even more as time proceeds;
c. You should factor in additional cost on top of your investment to begin with: think about repairs, maintenance, insurance, etc. Actually, the cheaper you buy - and GBP 20-25k isn't the world in Ferrariland - the larger the chance some serious stuff will pop up that you'll have to either take care of (at cost) or take a hit for (in proceeds at sale);
Don't want to trash a perfectly elegant alternative to putting your money in a pension fund though. Hell, I for one would argue that 20-30k spent on a nice '80s F is a great way of enjoying it while you still can. However, I wouldn't make an investment case in terms of defensible cash returns based on it. That's my €0.02 (in your pension fund?