Characteristics, Uses and Taxation of Investments - Tangible Assets


c. Tangible Assets: quite literally, perceptible to the senses. One can see, hear, touch (though carefully, if at all) and taste.

  1. Collectibles - this is a broad category that encompasses all manner of rare items of value. Rare coins [While still a relatively inefficient market, the trading of rare coins has become somewhat more standardized owing to professional appraisal services such as Professional Coin Grading Service (PCGS®) that provide a more standardized valuation process (http://www.pcgs.com)] and art are probably the most widely known example. Other well known examples are antiques, vintage automobiles and wine. The possibility exists to realize substantial gains if the item in question has the potential for substantial appreciation due to its uniqueness. Valuation is difficult, relying on the opinion of a knowledgeable appraiser familiar with the item in question. Secondary markets rarely exist for collectibles as they are not traded frequently resulting in few data points to buttress any appraisal of their worth. Some observers would argue that collectibles should remain just that. Because of their unusual attributes, their status as an investment may be viewed as questionable. Markets for and interest in collectibles can be fickle and are among the least efficient. Few buyers, knowledgeable or otherwise, exist. Sale for some items is accomplished at auction. Gains on the sale of collectibles are taxed at a rate of 28% (as ordinary income).
  2. Natural Resources - direct investment is often too expensive for the individual investor and is reserved for large pension funds or endowments. Individual investors' entry into a natural resources play would be through a pooled investment such as a mutual fund.
  3. Precious Metals - stores of value whose role as a hedge has over time been somewhat lessened due to the expanded capabilities of derivatives used for this purpose. Examples include gold, platinum and palladium.
Securities Markets


Related Articles
  1. Options & Futures

    20 Investments: Collectibles

    What Is It? Generally speaking, a collectible is any physical asset that appreciates in value over time because it is rare or it is desired by many. Many people think of collectibles as things ...
  2. Taxes

    How Are Collectibles Taxed?

    If you plan to sell collectibles, it's imperative that you know the tax implications.
  3. Taxes

    The Risks of Investing in Art and Collectibles

    Investing in art and collectibles has the potential to lead to a big payday, but it's often a difficult road.
  4. Taxes

    The Advantages of Investing in Art & Collectibles

    Investing in collectibles can be profitable and fun, and can offer tax benefits for some.
  5. Home & Auto

    Evaluating An Heirloom

    Whether it's jewelry, furniture or a book collection, once you inherit it you need to decide what to do with it. First, find out what it's worth.
  6. Home & Auto

    The Home Appraisal: Your Key to a Successful Refinance

    When you refinance your mortgage, everything hinges on the appraisal. Here's what appraisers look at, how to make your home look as valuable as possible and ways to fight back if the valuation ...
  7. Personal Finance

    What You Should Know About Home Appraisals

    Home appraisals are an unbiased way to determine a home's value. Here is what you need to know about obtaining one.
  8. Home & Auto

    7 Ways To Increase Your Home's Appraisal Value

    When it's time to sell your home – or refinance it – it will need to be appraised. Here's how to make sure the valuation is as high as possible.
  9. Home & Auto

    6 Ways Homeowners Can Dispute an Absurdly Low Appraisal

    Count it as one of the most frustrating and disappointing of all real estate quandaries.
  10. Personal Finance

    Your Heirloom Jewelry: How Much Is It Worth?

    You grandma's diamonds are now yours. Whether you plan to keep them or not, you first need an honest appraisal. Here's how to get one.
RELATED TERMS
  1. Appraisal Approach

    A procedure for determining an asset's value. The appraisal approach ...
  2. Qualified Appraiser

    An individual who has earned an appraisal designation from a ...
  3. Appraisal

    A valuation of property (ie. real estate, a business, an antique) ...
  4. Collectible

    An item that is worth far more than it appears because of its ...
  5. Appraised Value

    An evaluation of a property's value based on a given point in ...
  6. Appraisal Capital

    A form of accounting adjustment. Appraisal capital is created ...
RELATED FAQS
  1. Why should you invest in tangible assets?

    Read about some of the possible benefits of investing in tangible assets, such as bullion, real estate, art, collectibles ... Read Answer >>
  2. How is market value determined in the real estate market?

    Learn how fair market value is determined during a real estate appraisal and how market values are really decided by professional ... Read Answer >>
  3. Why is Average Collection Period important to a company?

    Discover why the average collection period can be a particularly important accounting ratio for a company that relies heavily ... Read Answer >>
  4. In which industries is Average Collection Period most important?

    Find out which industries are most concerned with average collection period, and how different types of companies interact ... Read Answer >>
  5. What are the differences between personal and business tangible net worth?

    Understand what the term tangible net worth represents, its significance, and how the calculation of net worth differs for ... Read Answer >>
  6. How is cash flow affected by Average Collection Period?

    See how reducing a company's average collection period can help cash flow, and learn why collections practices are so important ... Read Answer >>
Hot Definitions
  1. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  2. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  3. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  4. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  5. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  6. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
Trading Center