Featured: Here's How You Can Diversify Your Portfolio By Investing In Shares Of An XJ220 Or Flat-Twelve Ferrari

Here’s How You Can Diversify Your Portfolio By Investing In Shares Of An XJ220 Or Flat-Twelve Ferrari

Petrolicious Productions By Petrolicious Productions
July 23, 2018
9 comments

Rally Rd. recently joined the long list of SEC-recognized investment companies, and while it’s just one of many trying to make a go of it in a massively populated field of services focused on making two dollars out of one, it’s offering a very unique asset class. Rather than shares of stock or slices of an ETF or piggybacking on someone else’s mutual fund, Rally Rd. lets you invest in pieces of supercars and other coveted means of four-wheel transport.

You aren’t buying the A-pillar mirror of a Ferrari 512 or a few yards’ worth of the ’70s by way of Lotus Esprit upholstery, but rather you are investing in a percentage of the car as a whole. It’s basically the same way buying stock works, so if you think you’re better at picking the next rediscovered classics to appreciate as opposed to betting on the price of oil or the next Fed jobs report, this should interest you. At the very least, it’s a way to play around with alternative investments involving exotic cars while staying above board legally.

Let’s say you don’t have the capital to purchase something like a Ferrari 512 BBi, but you do have some savings looking for a more meaningful purpose than warming your low-interest bank account and you happen to be a car enthusiast who believes values are rising on cars like the 512; there wasn’t a way to act from this position. Rally Rd. changes the possibilities by providing the chance to buy shares. Sure, you don’t get to park it your garage at night and you can’t take it out on your favorite roads, but that was never on the table to begin with. This lets you participate in the marketplace without having a ton of capital, and even if you can afford to purchase outright, the ability to spread out your investments among multiple vehicles can galvanize the automotive side of your portfolio while removing the burdens and risks of things like storage and maintenance.

From the creators, here’s how it works:

We acquire best-in-class assets, then allow members to participate in vehicle “IPOs.” Once fully funded, registered broker-dealers maintain a once-monthly marketplace within the app that allows users to trade in-and-out of those securities.

Through our network of private collectors, automotive historians, premier dealers & auction houses, we identify & securitize limited production vehicles with historical & cultural significance and documented provenance. The cars are treated as works of art and meticulously maintained in our secure east coast facility. On the Rally Rd. app, members get to see every piece of documentation associated with an asset—view each angle, chat with others about the market, and make informed investment decisions with the help of interactive price charts, comparable transaction values, and expert opinions.

The company’s stated mission is to “Democratize alternative asset investing by providing access, liquidity, and transparency to markets that have traditionally only been available to a select few,” and that’s a pretty accurate summary of a service that allows a kid making McDonald’s money to reap the rewards of Italian sports car appreciation. It’s too early to say what the user makeup will look like for this service, but considering that to invest in artwork or cars or any other high-value tangible items one typically must have a lot of wealth to spare or borrow against, it’s conceivable that Rally Rd. could lower these barriers and offer a few more seats at the table. Currently the app has about 1,000 investors using it currently, who have completed three “IPOs” and raised more than $500k in the process. The average user age is 26, and the average investment is $480.

What do you think? Are you interested in buying shares of 356 Speedsters instead of more of your mutual fund?

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carlo rossiGary DrewNico86patdannels Recent comment authors
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carlo_rossi
carlo_rossi

Hey guys, here’s another opportunity. Buy into my SMDC fund (subsidize my dream car). You fork over your cash so I can park your money in my garage and you’ll receive a quarterly statement showcasing how your “investment” is doing via an index of auction results and classic car market valuations. Sell your share anytime. Better yet, How about you buy shares of classic cars I already own?!? they’re not blue chip long nose Porsche’s, but they’re high growth appreciating classics. Overtime, as my portfolio SMDC classics increases, your investment will be diversified via the variety of cars added to… Read more »

Gary Drew
Gary Drew

Way too much intentional vagueness in the info. Whether the value increases or reduces, the company is taking plenty of fees from your ‘investment’. They will have a great salary and health packages and car out of it regardless. AND, as already alluded to, the market for non-billionaire cars ie Astons, E-types, Daytonas and RS Porsches is dropping. The classic car mags are rammed full of DB4/5/6, E-types, 2.7RS where’s before these were swapping hands by word of mouth – no need for expensive auction house ads, or endless dealers paying for big magazine ads. Nope – this is an… Read more »

Nico86
Nico86

I guess it can be interesting for some. Even though as a car enthusiaste I’d rather buy my own VW Beetle instead of investing into 4 or 5 911’s that belong to someone else. Another bothering thing for me is -if I understood well- that company will buy these cars and keep them secured somewhere? That just means these cars will be locked up and away from the road for ever, and will never be driven again to protect the investors value. Sad.

pat
pat

This idea is interesting, but I’m disappointed that this article doesn’t talk more about the risks. Anyone who is considering this should seriously consider liquidity (there is very little here) and fees. The management fee is high.

dannels
dannels

Nice idea – US only unfortunately…

Matthew Lange
Matthew Lange

The mutual classic car fund is not a new idea (although I suppose having an app to monitor your investment is) and I think almost all have failed. I was even invited to consult on one that ultimately never got off the ground a year or so back. Looking at the Rally Rd website there is nothing that inspires any confidence that this will be anymore successful.

Dennis White
Dennis White

I’m no expert, but I think the market is still headed the other way except for the exceptional classic such as the 250 GTO that’s coming up in Monterey next month. The current issue of Sports Car Market magazine profiles the sale of a 365 BB and the article heading about value is that “the train has left the station”. In the same issue quite a number of the cars at the Ferrari Silverstone auction failed to sell.

Franz Kafka
Franz Kafka

Classic cars contrary to popular belief verging on urban myth are not an / investment . They are as anyone that has owned willing to be honest can tell you a liability once all the maintenance , restoration , insurance , fuel , transportation costs are added up . So before going all goo goo eyed over the $1.2 million that Ferrari sold for at auction y’all might wanna tally up the no doubt $3 million in bills the car cost the owner before selling not including auction fees , commissions etc In other words ; As with the ole… Read more »

Rich Diaz
Rich Diaz

from what I’m seeing on the website, part of what they do is maintain store and insure the cars, and thats included in the price. They aren’t being driven.