Assets to hold on to in 2010

Gold made headlines in 2009 as its price continued to set new highs, but the picture for other tangible assets was distinctly mixed. Peter Temple explains why 2010 looks more promising.

In early 2009, prices in popular tangible assets such as contemporary art and fine wine continued to weaken as the crisis took its toll. Areas like this suffered because they had been target investments for bankers' bonuses. But as stockmarkets recovered, so did prices in many tangible asset categories.

Markets with a solid base of collectors were less volatile, but not immune to the economic backdrop.

But in general the coming year looks like being a good one for tangible assets - parly because expectations that consumer price inflation may rise will boost the value of hard assets.

Stamps

Stamps show a similar pattern. Prices hit a peak in October 2008 and since then have been patchy, with European stamps in particular showing softness in price.

The SG100 index, compiled by stamp dealer Stanley Gibbons, has been virtually static for the last year, as has its GB Rarities index of investment-grade stamps.

But in the latter case this followed price increases of close to 40% in 2008. Commonwealth stamps, however, have been affected less by the adverse economic background.

Mike Hall, chief executive of SG, is optimistic. "We are seeing the beginning of an influx of new money from investors into rare stamps," he says. "The planned launch of a rare stamp investment fund in 2010 could have a significant impact on the market. Stamps have a value that is embedded in history."