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Risk, Return and Correlation Characteristics
Emotional Assets are a unique asset class. Each sector demonstrates it’s own individual risk and return properties. For example, did you know that : 1.   Compared with other assets (real estate and equities, for example), Emotional Assets have generated some of the best risk-adjusted returns over the past 5, 10, 15, 20 and 30 years 2.   The rate of change in the prices of Emotional Assets has accelerated over the more recent 1, 3 and 5 year periods 3.   The art market demonstrate classic boom and bust cyclicality, more characteristic of real estate and equities 4.   Other Emotional Assets – eg. Books, musical instruments, maps and atlases – demonstrate more stable risk and return profiles over both short and long time horizons 5.   Some Emotional Asset returns show a tendency to move in line with each other i.e. they are positively correlated eg. Stamps and coins 6.   Nevertheless, there is significant divergence in the behaviour of the various Emotional Asset price indices to enable an investor to benefit from holding a diversified portfolio of these assets. | |
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| Although there has historically been a demand for Emotional Assets that exceeds supply, causing substantial increases in value, there is no guarantee that this will be the case in the future. Demand for Emotional Assets of a particular area, issue or type may be affected by regional or world trends and tastes. | |
