The Impact of Unconventional Monetary Policies on Unique Alternative Investments

Abstract

This chapter investigates the impact of central banks' unconventional monetary policies on sectors of unique and traditional alternative investments beyond the stock market. More specifically, authors examine how quantitative easing (QE) programs, imposed by the FED and the ECB during the financial crisis, affected the fine wine market and rare coins in comparison with real estate, commodities, and crude oil. The methodology used in this chapter includes multiple regression analysis. As dependent variables, the LVX 50 Index, the Rare Coin Values Index, the REIT Index, the CRB Commodity Index and the Crude Oil Futures Index, are used for each sector respectively. Our empirical analysis shows that the QE programs applied had different outcomes between our sample markets. Thus, investors should evaluate the signals associated with the announcements of prospective monetary policies in their attempt to achieve a sufficient portfolio diversification and to harvest superior returns at the same time.