This is Why You Should Invest in Containers

Disappointment from traditional investments has prompted investors to invest in other options. Among the leading alternatives is shipping containers.

With disappointing performances over the last decade, the traditional choices for investors to invest in are quickly losing their appeal. This has prompted investment-seekers to choose other options when building their portfolio. Among the leading alternatives is shipping containers.

To support the global economy’s constant growth, the demand for shipping containers is always increasing. To meet the needs of their customers, container transport and leasing companies must continue to invest and innovate. This means introducing new technologies and operations that will improve their performance.

Container owners are a fortunate group. For those who invest in containers, the world is full of opportunities. Whether private investors invest in one or many containers, they will profit from the world’s constant economic growth. Looking ahead, global economic growth is expected to rise from 3.1 percent in 2016 to 3.5 percent in 2017 and 3.6 percent in 2018.

Containers are extremely versatile and have many applications in world trade. Computers and laptops from China, textiles from India, and perishables from South America are among the imports and exports that are frequently transported in cargo containers. This worldwide dependence upon them reinforces their value to the investors that invest in them.

When investors search for something to invest in, they are generally concerned with two factors: exposure to risk and the investment’s rate of return. Investing in shipping containers has demonstrated that, like gold, it protects an investor’s money during financially challenging times. Furthermore, over the last 25 years, container investment returns have outperformed the traditional options that investors commonly invest in. This includes the S&P and bonds.

invest containers returns

Shipping containers are ideal for investors who would like to invest in an asset that consistently generates income and preserves wealth. And, the fact that cargo containers are needed to support worldwide economic growth, means that they are expected to be in high demand for decades to come. With the lifespan of a container being more than 20 years, people who invest can expect consistent returns for at least the next two decades.

There is a New Focus in The Container Shipping Industry

The container shipping industry has experienced a multitude of financial and logistical challenges in 2015-2016. These adverse conditions have caused shipping lines to review their performance and adopt an operational strategy that focuses on prudence and efficiency.

Prudent [Pru-dent] acting with or showing care and thought for the future.

In perhaps the greatest example of the action shipping lines are taking to demonstrate their commitment to improving operations in 2017 (and beyond), A.P. Moller-Maersk recently announced that it will divide its shipping and energy holdings. This move will allow the company to participate in opportunities in each individual sector, that it may have previously overlooked as a conglomerate. This means more focus on Maersk’s shipping and logisitics services.

If you are investing in containers, or have gained access to the shipping industry through other means, the industry’s new focus offers a much more stable environment for you to forecast your investment returns. After all, less adversity in the market means more confidence for investors.

Partnerships & Alliances.

As the environment became more challenging in the shipping sector, container lines looked to establish partnerships and alliances with competitors and rival companies. This approach provides logistical advantages and has allowed container lines to pool their maritime assets and more efficiently deliver services to customers.

At the moment, the industry’s three established partnerships are:

  1. 2M Alliance – Maersk, Mediterranean Shipping Company
  2. Ocean 3 Alliance – CMA CGM, UASC, COSCO Shipping
  3. THE Alliance – Hapag-Lloyd, Kawasaki Kisen Kaisha Ltd. (K-Line), Mitsui OSK Lines Ltd., Nippon Yusen KK (NYK), Yang Ming Marine Transport Corp.

New Services and Trade Routes.

Industry leaders have also reviewed their shipping routes to maintain their operational efficiency. For example, in a move that focuses on the more profitable and prudent shipping opportunities in China, Maersk Line has removed 10 Chinese ports from their ports of call.

For many of the industry’s leaders, South American markets have demonstrated strong demand and shown they can be profitable. To benefit from this prosperity, the Mediterranean Shipping Co., CMA CGM, Hapag-Lloyd, Hamburg Sud, China Shipping, and Hyundai Merchant Marine are revising their existing services on the Asia-West Coast South America routes. In May of 2016, Maersk Line added a new southbound weekly shipping service between North Asia and the west coast of Latin and South America.

It’s Good News!

The container shipping industry is a business like any other business. And, in business, profit tops the list of important things to focus on. For leaders in this sector, it has meant taking prudent measures to reduce operating costs and increase their profits.

Some container shipping lines have introduced new, more profitable services and routes, while others have sought to strengthen ties with other companies and work in partnership toward making more money. In either case it means a rise in confidence in the industry, and that is good news for investors and container shipping lines.

Hard Assets: Attractive Alternative to Traditional Investing

Hard assets are commodities like gold, platinum, silver, copper, nickel, and oil. Based on their current asset performance, hard assets are in a Bull market that analysts believe could last for many more years. This can be attributed to the fact that hard assets are negatively correlated to stocks and bonds; meaning that they tend to behave differently and move in the opposite direction of equities. That said, hard assets are a popular way for investors to “cushion the blow” in the event that the stock markets take another tumble, or bond values fall.

hard asset investments appealing alternative

If preserving wealth is your goal, then investing in hard assets is an attractive alternative to risky traditional investments.

Aside from their non-correlation to traditional investments like stocks, hard assets are recognized as a safe haven for an investor’s capital. Remember the Cyprus banking fiasco? What happens to investors nowadays who place their hard-earned money in a financial institution that cannot guarantee the deposits? Let’s just say that hard assets play an important role in risk management within a portfolio, and that if preserving your investment principle and wealth is your primary goal, then investing in hard or tangible assets is an attractive alternative to risky traditional investment options.

Another reason that analysts are fond of hard assets is that the economies in China, India and other emerging markets, are growing rapidly. In fact, according to the International Monetary Fund, in the next five years Asia will represent a third of the world’s output and its economies will grow nearly 50 per cent. To me that statistic implies that we can expect significantly higher levels of energy consumption, as well as a rising demand for raw materials like silver and other precious metals. Looking ahead, as businesses and governments forecast their need for raw materials, I expect that we will see an increase the demand for commodities, and in doing so, raise the value.

purchasing alternative investments is easy

In most instances purchasing alternative investments is as easy as purchasing stock was “in the old days.”

Making an investment in hard assets is more appealing and much simpler than it was previously. In today’s marketplace there are an increasing number of investment opportunities that invest in precious metals, gemstones and even investing in containers. These offerings are available from an investment broker, and in most instances are as easy as purchasing stock was “in the old days.”

Why is Investing in Gemstones an Attractive Investment Option?

Investors finally discovered that introducing gemstones into an investment portfolio, is the secret to improving portfolio returns, while mitigating risk.

As investors search through piles of investment information about elegant gems, many are realizing that the key to investing in gemstones, is to start slow and build a valuable collection. Commonly, gemstones are investments with an intrinsic value (value in use) such as real estate investing, precious metals like gold, copper and other forms of physical assets. Remarkably, in most instances, thanks to their relatively low relationship to other financial assets (equities and bonds), gemstones have demonstrated they can provide investors with a valuable option to diversify their investment portfolios.

It is also known that gemstones will increase in value over the next decade, as they are slowly getting harder to find and the demand is rising. Moreover, they offer a degree of protection against inflation, unlike money or stock market investments.

What is the bottom line? Precious gems are secure investments, IF you know how to choose them.

In these challenging economic times, when the appetite for risk among investors for equities and bonds is declining, most fund managers now advocate that portfolios that include hard assets – such as gemstones, will generally provide a better risk/return profile; than investment portfolios without them. Therefore, contemporary investors see gemstone investing as an alternative investment, that offers protection against inflation and preserves their investment principle.

hard assets provide better risk return

Portfolios that include hard assets, such as gemstones, will generally provide a better risk/return profile than investment portfolios without them.

Although there will be a constant evolution of different types of gemstones, ranging from energy applications to a tangible possession, the one most crucial point to note is that gemstones are able to maximize the asset holder’s wealth.

As we are aware in today’s contemporary investment climate, gemstones are able to preserve capital from eroding and a natural hedge against inflation, and (for me) both of these are signs that this asset has created its own pull factor. It makes absolute sense to me!

The current unprecedented global monetary and fiscal stimulus undertaken taken by Western Governments, coupled with the high inflation in the East, has somewhat rocked the traditional stock and bond markets; resulting in gemstones becoming a preferred mode of investment. According to analysts, there is no mistake about where gemstones values are headed next. All signs point to even higher values.

the diamond business harry winston quote

I love the diamond business. It’s a Cinderella world. It has everything. People; drama; romance; precious stones; speculation; excitement. What more could you want? – Harry Winston

Nowadays many portfolio investors – after years of trial and error, have finally discovered that the benefits of introducing alternative investment to an investment portfolio, is the secret to improving investment returns; while mitigating risk at the same time. All things considered, gemstones are very appealing to savvy, confident investors and have emerged as a nice fit for investors and institutions.