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An investment worth noting

MARKET uncertainty may bring dismal times for investors in stocks and the many businesses that feed off share traders, but the same cannot be said for the market in collectibles.

Over the past two years business has been booming for investors in collectibles, auction houses and dealers.

Industry insiders say many people who have suffered losses due to the 25 per cent decline in world stock markets are seeking to diversify from traditional investments, and are often looking no further than their own hobbies.

And the most lucrative of these over the past decade has been that involving banknotes.

Perth banknote and coin dealer Dick Pot, from Rainbow Rarities, said many people were looking for alternatives.

“With the share market a bit shaky people are looking for other investments,” he said. “Most investors started out as collectors.”

Publicity about the strong returns has also propelled the interest in the sector.

Monetarium manager Barrie Winsor said the market tended to go against the trend of other asset classes.

“The market tends to be counter-cyclical to the general market. So when the equity market drops off, we often have the property market picking up, then following this demand for collectibles increases,” he said.

“It eased off about a year ago but has been picking up again, particularly since property has started to go off the boil.”

Mr Winsor said people wanted a tangible physical asset that could be quickly traded if their lifestyle deteriorated.

Research by Access Economics shows that collectibles have more than held their own when compared with other assets.    

Banknotes offered by far the best returns during the past decade with increases of close to 500 per cent, according to an Access Economics report. Australian wines, on average, increased by about 300 per cent, while thoroughbred prices, stamp errors and coins also featured strongly above both real estate and Australian shares.

Mr Pot said there was a growing interest in banknotes, so much so that it was far more difficult to buy than to sell.

Mr Winsor agreed.

“More and more people are getting interested yet the material that is available, such as the very early notes, are not increasing and if anything are decreasing,” he said.

Despite the appeal, however, most people tend to be fairly conservative when investing and are unlikely to borrow money to pay for notes.

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