Many Americans have a hobby. If they are well off, they are likely to combine this activity with investing.
A study released last week by BMO Private Bank found that more than half of affluent Americans engaged in some form of hobby investing—sometimes called passion investing.
This involves adding collectible assets to an investment portfolio as both a means of diversification and a way to have and hold things investors love most.
BMO Private Bank found that wealthy Americans surveyed in the study were most passionate about investing in the following items:
- Classic cars—24%
- Sports memorabilia—24%
“We’re finding that an increasing number of our clients are engaging in some form of hobby investing,” the bank’s chief investment officer, Jack Ablin, said in a statement.
“People who choose to invest in their hobbies often do so because it allows them to feel a sense of engagement without having to spend a lot of time on them. Many hobby investors are keen to create a legacy to pass on to their heirs — one that is unique to them and reflects their interests.”
BMO Private Bank said the study was the last in a series examining trends among high-net-worth Americans. It was based on an online survey conducted by Pollara in the spring of 2013 with a sample of 482 American adults who had at least $1 million in investable assets.
‘Fun,’ with a Caution
Sixty-two percent of respondents said they engaged in hobby investing simply because it was “fun,” while 54% said they did so to combine their interest with investing, and 40% wanted something unique to pass on to their heirs.
Thirty-nine percent considered such investments sound, and expected them to grow in value.