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Issue link: http://digital.canadawide.com/i/1332052
P R E C I O U S M E T A L S Until a century ago, gold was a standard component in any well- off person's portfolio. In developing countries such as India, it still is. The big problem, as Warren Buffett and many other champion investors point out, is that it's dead money; it doesn't produce any income. Outside of jewelry, dental fillings and a few high-tech applications, there's no practical use for gold. But it's still the most widely used substitute for cash, and amid central banks' profligacy since the COVID-19 outbreak, it's looking more dear against major currencies all the time. The same goes for other pre- cious metals such as silver and plati- num, though these more thinly traded elements tend to be more volatile. EASIEST WAY TO BUY: An exchange- traded fund (ETF) invested in physical gold like the SPDR Gold Shares (NYSE- Arca: GLD) LIQUIDITY: High DEAL FRICTION: Low BIG RISK: Global economic growth C R Y P T O C U R R E N C Y Bitcoin, by far the most widely held and traded of the 1,500 or so cryptocurrencies in existence, shares a lot of characteristics with gold. Its supply is more or less fixed at 21 mil- lion units, whereas "cash is essentially designed to lose purchasing power every year," says Mitchell Demeter, who installed the world's first bitcoin ATM in Vancouver in 2013 and currently serves as president of online trading platform Netcoins. And with central banks print- ing money like never before during the COVID shock, there's justifiable concern that inflation will soon erode the value of dollar-denominated assets but leave holders of alternatives like gold and bitcoin sitting pretty. Bitcoin's advantage over gold is that it's easier to store, easier to send around the world and easier prove it's real (whereas a gold bar can be tainted or faked). There's even a growing ecosys- tem for putting cryptocurrency to work for a modest return, unlike gold, which just sits in a vault. Cryptocurrency leaves one big unanswered question, though. Gold has retained its purchas- ing power over millennia; roughly the same amount will buy a family home today as in the 1930s. Can bitcoin, which has been around for all of 11 years, pos- sibly do the same? EASIEST WAY TO BUY: From an online exchange such as Netcoins, Bitbuy or Coincurve. You send the cash to the platform, typically by e-transfer, and the bitcoin or other units get deposited in a hardware wallet or digital wallet in your phone or in the cloud LIQUIDITY: Medium DEAL FRICTION: Medium; a typical fee is 0.5 percent of the transaction amount BIG RISK: Crypto has attracted unscru- pulous players, highlighted by the downfall of B.C.-incorporated exchange QuadrigaCX after the founder's suspi- cious death in 2019, leaving 76,000 account holders $169 million out of pocket. Vancouver city council has considered a city-wide ban on bitcoin ATMs on the grounds that they enable criminal activity. Some industry partici- pants, including Netcoins, are lobbying for more government oversight that would reassure consumers C O L L E C T I B L E S Even more than other alter- natives, collectibles are a crapshoot. What people consider cool and valu- able today may be more so tomorrow, or not at all. Take that most democratic of collectibles (pre-Internet, anyway), stamps. "We're selling [Canadian] stamps from the '80s at half the face value for putting on parcels," laments BYRON EGGENSCHWILER JANUARY/FEBRUARY 2021 BCBUSINESS 23 Here's a starter guide to get a sense of whether such alternative investments may be for you. Buyer beware, though: none of these assets are as easily and transparently traded as financial securities. And that anecdote about the guy who made a killing in antique cars seldom tells the whole story.