Although investing in shipping containers may not be particularly mainstream, it is a surprisingly profitable and reliable way to allocate your investment capital. In fact, shipping container investments can outperform many more traditional investment options, including precious metals. Here are three of the core reasons that investing in shipping containers will likely yield higher returns than investing in gold.
Shipping Containers Produce Reliable Cash Flow
In terms of the logistics of the investment, shipping containers are more like real estate than they are like gold. Very similar to a rental property, a shipping container will produce a fairly reliable stream of income in the form of the fees you are paid by the shipping company that is using it. The fact that a shipping container can continue to produce a steady cash flow year after year is the first and perhaps most important advantage of shipping containers over gold. While gold can net you a good profit when you sell it, the amount you receive from a sale of gold will always be a one-time income. Shipping containers, if held and leased for long enough periods of time, can produce considerably more income over the course of their lifetimes.
Shipping Containers Are Less Volatile In Price
Although gold is famous for being a stable hedge against inflation during times of economic unrest, its spot price can be fairly fluid. If you buy gold low and sell it high, you can certainly make a nice profit. However, if you buy at a time when investors are less than confident about traditional equities markets, you could end up overpaying for it. By contrast, shipping container prices are fairly stable. Though they do vary from unit to unit, the price of a given container in a given condition is more or less consistent. Since the value of a shipping container investment is more in the lease fees you can get from it than in the equity value of the container itself, there’s also less pressure on investors to time the purchase correctly.
You Won’t Be Pressured To Sell Off The Asset
With gold, stocks and other traditional equity investments, deciding the right time to sell is just as important as buying at the right time. Selling at the right time also requires available liquidity, which can be a bit difficult to find in the gold market if too many other investors are selling at once. With shipping containers, however, it rarely makes sense to actually get out of the investment altogether unless your shipping container has reached the end of its usable life. Without this pressure to sell the asset, you can pursue a more stable growth strategy for your shipping container investments.
These are just a few of the reasons that investing in shipping containers can be more profitable than putting the same amount of money into gold. If you’re looking for a great addition to your investment portfolio that can produce reliable cash flow, consider looking into shipping container investments.
Headquartered in Hong Kong, Davenport Laroche’s strategic location in the region allows our investors to benefit from the busiest trading market in the world, China.