Laurence D. Fink, the CEO for the major investment firm, BlackRock, stated at a recent conference with investors that gold has lost its luster for some investors and that these investors are now turning to contemporary art and real estate as safer harbors for their liquidity. One of the problems that the wealthy face consistently is where to place liquid assets. Banks are not safe places as the amounts on deposit at the bank is not protected against a collapse in the economic market and any reserves just sitting on deposit will also be subject to degradation by inflation. Art and real estate on the other hand are safer investments since these assets constantly adjust for inflation regardless how long the assets are held by the owner. These assets can also be passed down to heirs with much less tax consequences to the theirs as oppose to cash. Investors Turn Away From Gold and Towards Art and Real Estate
While gold is still a good investment product, it is cumbersome to store and unlike art and real estate, the owner cannot easily exercise control over large amounts of gold. Additionally, not everyone has their own vault and while gold owners have the option of simply placing their gold in a professional vault, many do not feel secure with simply carrying a receipt as ownership of their assets.
Christian Broda understands that Real Estate is a a fixed asset as there is very little opportunity to create new real estate. Additionally, art has been positioned to be a new currency as many pieces in recent years have been sold for amounts in excess of $5 Million Dollars.