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Ecuador’s currency is the US dollar and long term expect the greenback’s purchasing power to fall.

The truth is the purchasing power of all currencies is at risk.

I bet off and on against the US dollar and other currencies myself.  Our latest advice has been to short the Japanese yen… but such speculation  is about choosing which currency is least bad… not which is good.

Plus risk reward ratios are terrible right now. The stock market looks good but rarely offers to value at all time highs. Bonds and cash are terrible and gold and silver always work in the long term, but short term are undependable.

Two ways to protect purchasing power are with real estate and collectibles.

There are some great properties in Ecuador and we have viewed many at this site in the last two weeks like those in the paid advertisement for two Ecuador properties for sale in Quito and Otavalo.

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Hacienda Bougainvillea is an expansive estate in world-famous Otavalo, Ecuador.

This 8-bedroom, 7-bath property is an excellent investment as a bed and breakfast, weekend get-a-way for family gatherings and special events, or as a full-time executive home.

Located one hour north of the new Marsical Sucre International Airport in Quito, Hacienda Bougainvillea is a 5-minute drive from South America’s world-renowned Otavalo Market, and is within 20 minutes of Cotacachi. The property is surrounded by the tranquil Rio Blanco River and overlooks Mount Imbabura, one of Ecuador’s most spectacular sights.

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Complete with a horse barn and stables, immaculate gardens and administrator and service quarters, Hacienda Bougainvillea features a large restaurant-style kitchen fully equipped for serving dozens of guests.

List price for this property is $875,000.

A greater collection of Hacienda Bougainvillea photos can be viewed at www.proecuadormarketing.com

Serious inquiries about this property may be directed to steve@proecuadormarketing.com

ecuador-property

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ecuador-property

Also for sale is this exquisite 2-BR, 2-BA condominium located in one of Quito’s most desireable areas.

Private parking and 24-hour security are added benefits to this, 1,750 square-foot listing. Enjoy the view overlooking the mountains, or take advantage of all there is to offer in the fully custom kitchen complete with restaurant style gas range, refrigerator and microwave.

Listed at $180,00, this condo unit is within minutes of some of Quito’s nicest conveniences and attractions.

ecuador-property

Additional photos may be viewed at www.proecuadormarketing.com and inquiries may be sent to steve@proecuadormarketing.com

Here is one way to protect purchasing power while living in Ecuador… or anywhere.  Have fun and gain profit with collectibles.

In the long run, due to the global economic connection, the purchasing power of almost all currencies is likely to go down.

One way to overcome this problem is to have a passion and investment in collectibles.  Collectibles are like gold with fun attached… if you have an interest.

Failing global currencies will enhance the demand for collectibles.

Antiques, art, old cars, stamps, coins, wines, autographs and other unique memorabilia have been among the best long term investments for those who know what they are doing.

Collectibles especially make sense if you have expertise and/or a passion… ideally both.

Investor-collectors, seeking out items they love can expect to see tangible long term increases in value.

There is especially room for growth in Asia and China as China has now become the second largest economy in the world (China’s economy  recently passed Japan’s in size).

Asia has witnessed a 10% growth in the collectibles market, while China has seen growth of 15% and some world record prices have been seen within the Chinese market in the last twelve months.

In December 2009, a Hong Kong auction witnessed a world record price for a single bottle of Château Pétrus 1982 vintage wine, which was auctioned for an impressive  £62,000 ($94,000).

In January 2010, another Chinese record was smashed with the sale of one of the rare 1897 Red Revenue Stamps which sold for £470,000 ($710,600).

In April this 2012 a piece of Imperial Jade relating to Qianlong of the Qing dynasty sold for a world record price of £8,005,000 ($12,200,000) , at Sotheby’s, Hong Kong.

Then a month later, more world records were set as a rare Chinese snuff bottle was auctioned off for £5,800,000 ($8,750,000), to cap off a truly remarkable year in the Chinese collectibles, market.

In the Chinese market alone, world records continue to be set for rare collectibles like stamps and wine. Hong Kong hosted its annual Winexpo event in May, with 880 exhibitors from thirty two countries on show. The three day event saw 12,000 Asian visitors, with a 40% attendance increase from the previous year demonstrating the growing market in the Far East.

Collectible Caution

The collectible market can be splotchy.

In June 2010 Europe’s most valuable ever art auction was slow.

Christie’s in London hosted one of the most anticipated sales for years, selling art with a total presale estimate of £163m-231m.

The two stand-out jewels among the 63 lots were a blue period Picasso and a Monet waterlily painting, both with estimates of between £30m-40m and even higher expectations. But the Picasso sold at its low-end estimate – for £31m – and a final bid of £29m for the Monet meant it went unsold. In total, 16 lots were unsold.

There were disappointing lots but sales did reach £152.5m a UK art auction record.

The risks in investing in collectibles include mark-ups, maintenance, forgery and delay.

Collectible dealers usually mark up the price to make a quick turn profit. Collectors, may have to hold an item for years and the value may or may not increase.

Many collectibles require special care to keep them in good condition. Be sure you can provide this care.

Counterfeiting and puffery are great risk. Your collectible may be a fake or offered as a higher grade. Be sure you know a lot about what you buy.

Collectibles can include art, antiques, old coins, vintage cars, stamps, rare books, Persian rugs, baseball cards, bottles of fine wine and other items that offer the potential for appreciation in value.

There is such a diverse market for collectibles that almost everyone can find something of interest to specialize in. Look at just a few headlines about collectibles…

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from a search on…

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“Collectible News”.

There are some downsides about collectibles to be sure.  Of course, collectibles do not generate any type of cash flow during the time that they’re owned (unless they can be used in some way… in a show or a museum perhaps).

The markets for collectibles are informal as well as unregulated.  This can be good news if you know what you are doing and understand your market. This is bad news if the seller knows more than you do!  The IRS also does not treat collectibles well.  Unlike capital gains, which can be as low as 15%, collectible taxes are 28% of the profits, 35% if sold in less than a year.

One may consider a collection as an investment… but collectibles are even better as a lifestyle oriented business.  Since the IRS treats collectible income like business income… perhaps we should as well.   If you do collect, do so because you love the stuff you are collecting, not because you hope it will make you rich.  Collectibles as an investment are very risky. Collectibles as enjoyment are fun and from this joy you can create business opportunities.

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collectibles

If you like the thought of collectibles I recommend the book “Collectible Investments for the High Net Worth Investor”.   One problem about collectibles has been finding a place where an investor,  financial adviser or investment manager can go to learn about these investments.

There has been no comprehensive resource from the financial standpoint that suited me–until now. Dr. Stephen Satchell of Trinity College, Cambridge, has developed a book in which experts in various types of collectibles analyze the financial aspects of investing in these. Chapters address issues such as: liquidity challenges, tax ramifications, appreciation timelines, the challenge of forecasting and measuring appreciation, and the psychological component of collecting and the role of emotion in collectible investing.

So we’ll see in 2013 if collectibles really do make sense as investments and for business.

I doubt that my Gotham baseball games will make much profit but what joy and interest are important and what a business and or investments in collectibles should be about.

IF YOU HAVE NO INTEREST IN ANYTHING YOU WOULD LIKE TO COLLECT BUT WANT TO INVEST IN COLLECTIBLES THERE ARE A COUPLE OF OPTIONS.

One way to invest in collectibles is through Stanley Gibbons.  This 150+ year old firm expanded into Asia in 2011 ans the USA in 2012.

They have several investing programs.

Here are excerpts from their investing brochure:

We are living in a world where you could genuinely lose almost everything you have worked for; many people have. Diversifying into rare stamps, rare coins and other prestige collectibles could help you anchor part of your portfolio through the storms in other markets.

The world is uncertain; rare stamps have proved themselves not to be. So, if you’re looking for potentially the best place to put your money over the next 5-10 years, the stability offered by a historical, alternative asset like rare stamps could be your answer.

To illustrate the potential of rare stamps as an investment vehicle, we have made a comparison with what are considered to be two of the UK’s safest assets, property and gold. Look at the graph below, which clearly emphasises the volatility of gold and property (as well as other conventional investment vehicles) and the strength of the premium stamp market. It demonstrates the rise of the GB 30 Rarities Index on Bloomberg, the index of the top GB rare stamps:

stanley gibbons stamps

As you can see, increases in the GB 30 stamps have been consistent and, in some cases, dramatic.

Just as a snapshot of the strength of the market, in the recent crash of 2008, when the value of traditional asset classes plummeted, the GB30 Rarities Index increased.

Located in the heart of London at 399 Strand, Stanley Gibbons has been the home of rare stamp collecting since 1856. Stanley Gibbons is a globally recognised name and a brand synonymous with quality and expertise.

We were awarded the Royal Warrant by King George V in 1914 –an honour that we still hold proudly today and we maintain by trading with the Royal household.
Stanley Gibbons – quality, expertise & reassurance for you

What that means for you is that you can rely on over 150 years’ experience and skill in appraising, buying, describing and selling stamps; in today’s uncertain times, trust and security may not be flashy, but they are fundamentally important to preserve your wealth. When it comes to investing, it is vital to go with a name you can trust.

Look at the examples below; our experts know the difference between an investment grade stamp and ‘just another stamp’ or a worthless forgery.

One of these stamps is worth £240.The other is one of Britain’s most expensive stamps worth £375,000.

stanley gibbons stamps.

Can you tell which is which?

Look at how their prices (taken from Stanley Gibbons published catalogues) have risen in the last 10 years.

Here is a selection of the type of rare stamps that Stanley Gibbons offers for investment purposes.

STANLEY GIBBONS STAMPS

Look at how the prices (taken from Stanley Gibbons published catalogues) have risen in the last 10 years.

The prices of rare stamps is fully trackable with the prices recorded in Stanley Gibbons official, annually-published catalogues, the first of which was published in 1865.

They represent the selling price of Stanley Gibbons Limited at the time of publication and are an expert estimate of market value, taking into account prices realised at worldwide auctions and reported private sales.

As well as rare stamps, Stanley Gibbons also offers you investment opportunities in rare coins, wartime medals and historical manuscripts as further options for diversification and portfolio growth.

There are two ways to invest in Collectibles through Stanley Gibbons.

Capital Growth Plan (CGP)

This investment is ideal if you are looking for healthy, uncapped returns over the medium to long term.

The CGP also provides you with peace of mind from knowing that you have invested in a tangible heritage asset with a long track record of performance and one that has no correlation to mainstream assets.

This means your investment is unaffected by volatility and economic swings in other markets.

New Flexible Trading Portfolio (FTP)

Invest with absolute flexibility and no minimum holding period.

If you don’t want to be tied in to a long term contract and want to enjoy the opportunity to trade your stamps or top up at any time then the New Flexible Trading Portfolio is for you.

No previous stamp knowledge is required, and your only decision is when to sell and whether to re-invest your investment returns with us.

We offer you three primary investment products, each designed to suit the way you wish to invest.

For more on Stanley gibbons investments call  877-340-2247

Or click here for Stanley Gibbons information.

This the most difficult time to protect purchasing power that I have seen in 40 years of tracking multi currency investments.  This is why I am happy that Stanley Gibbons that I have known for decades is made it possible for investors to tap into the purchasing power of collectibles…

 

Gary

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We DO NOT investigate properties when they are advertised so be sure to complete your due diligence and always use an independent Ecuador attorney who represents you (not the seller) when you buy real estate in Ecuador. Also we want to be sure that you check the claims of the developer/seller and make sure that you are satisfied. We also recommend that you rent before you buy and become familiar with Ecuador.