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WHAT IS AN NFT?

Non-fungible token. “Non-fungible” more or less means that it’s unique and can’t be replaced with something else. For example, a bitcoin is fungible — trade one for another bitcoin, and you’ll have exactly the same thing. A one-of-a-kind trading card, however, is non-fungible. If you traded it for a different card, you’d have something completely different. 

HOW DO NFTs WORK?

At a very high level, most NFTs are part of the Ethereum blockchain. Ethereum is a cryptocurrency, like bitcoin or dogecoin, but its blockchain also supports these NFTs, which store extra information that makes them work differently from, say, an ETH coin. It is worth noting that other blockchains can implement their own versions of NFTs.

NFTs can really be anything digital (such as drawings, music, your brain downloaded and turned into an AI), but a lot of the current excitement is around using the tech to sell digital art.

Traditional works of art such as paintings are valuable precisely because they are one of a kind. But digital files can be easily and endlessly duplicated.
With NFTs, artwork can be “tokenised” to create a digital certificate of ownership that can be bought and sold.

As with crypto-currency, a record of who owns what is stored on The Blockchain network. The records cannot be forged because the ledger is maintained by thousands of computers around the world

NFTs can also contain smart contracts that may give the artist, for example, a cut of any future sale of the token. In theory, anybody can tokenise their work to sell as an NFT but interest has been fueled by recent headlines of multi-million-dollar sales.
On 19 February, an animated Gif of Nyan Cat – a 2011 meme of a flying pop-tart cat – sold for more than $500,000 (£365,000). A few weeks later, musician Grimes sold some of her digital art for more than $6m. It is not just art that is tokenised and sold. Twitter’s founder Jack Dorsey has promoted an NFT of the first-ever tweet, with bids hitting $2.5m.

These are but just a few examples of the NFT market.

NFTs

Lusate is an investment company for digital assets. We invest in non-fungible tokens (NFTs) directly and in companies or funds that have exposure to NFTs and blockchain technology. The company is aiming to even up the investment market for non-fungible tokens, digital entities that allow unique items, such as works of art, to be registered and traded on a blockchain.

NFT’s are the latest innovation to come out of the crypto currency and blockchain industry. They are tokens that allow unique items, such as works of art, to be registered and traded on a blockchain. Existing NFTs, including the first-ever Tweet, have already been sold at auction for eye-watering amounts running into the tens of millions of dollars. However, for most mainstream investors, even wrapping their heads around the concept of NFTs may prove difficult, let alone figuring out how to invest in them.

It is at the crossover between ordinary investors and the new NFT market that Lusate aims to position itself. We provide ease of entry into the NFT market for individuals and companies alike.

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Cash Investments

“Cash” investments like money markets and CDs have the least risk of all investment types. They can be used to hold money you’re waiting to invest or to lower the overall risk of your portfolio. Cash investments can lower the overall risk of your portfolio and give you a place to hold money while you wait to invest it.

  • Cash investments are a place to keep money safer from market risk.
  • Your choice between money markets and CDs depends on factors like whether you need to lock in a certain yield and whether you prefer to be covered by FDIC insurance.

Cash investments are very short-term investments. While intended to be stable, they aren’t quite as safe as a bank account. So why bother with them? If you have money you need to keep accessible—because you plan to spend it soon or because you’re holding onto it while you research other investments—you can often earn a little more interest than you’d get in a bank account.

But making money isn’t the goal. Cash investments are meant to provide a relatively low-risk investment option for money you already have.

These securities have ultra-short-term maturities (from a few days to 1 year) and are considered lower-risk investments. Their share prices are intended to be stable, although the interest rates they pay will fluctuate (and the stability of the share price isn’t guaranteed). Money markets are also extremely liquid. You can invest in them through a mutual fund.
Certificates of deposit (CDs) are promissory notes issued by banks. As such, they’re insured up to a certain amount by the Federal Deposit Insurance Corporation (FDIC) and considered completely safe if held until maturity. Like bonds, CDs have a specified interest rate and maturity date (usually 5 years or less). If you buy a CD through a bank, you’ll pay an interest penalty if you need your principal back before the maturity date. If you buy a CD through a brokerage, the value of the CD will fluctuate but there’s no penalty for selling the CD on the secondary market before maturity.

Bond Investments

Companies and governments issue bonds and then pay interest to their buyers. You can buy bonds to get income and to temper the risk of stock investments. Unlike stocks, bonds don’t give you ownership rights. They represent a loan from the buyer (you) to the issuer of the bond.
  • Bonds can be issued by companies or governments and generally pay a stated interest rate.
  • The market value of a bond changes over time as it becomes more or less attractive to potential buyers.
  • Bonds that are higher-quality (more likely to be paid on time) generally offer lower interest rates.
  • Bonds that have shorter maturities (length until full repayment) tend to offer lower interest rates.

Bonds are issued by governments and corporations when they want to raise money. By buying a bond, you’re giving the issuer a loan, and they agree to pay you back the face value of the loan on a specific date, and to pay you periodic interest payments along the way, usually twice a year.

Unlike stocks, bonds issued by companies give you no ownership rights. So you don’t necessarily benefit from the company’s growth, but you won’t see as much impact when the company isn’t doing as well, either—as long as it still has the resources to stay current on its loans.

Bonds, then, give you 2 potential benefits when you hold them as part of your portfolio: They give you a stream of income, and they offset some of the volatility you might see from owning stocks.

If you buy a bond, you can simply collect the interest payments while waiting for the bond to reach maturity—the date the issuer has agreed to pay back the bond’s face value. However, you can also buy and sell bonds on the secondary market. After bonds are initially issued, their worth will fluctuate like a stock’s would. If you’re holding the bond to maturity, the fluctuations won’t matter—your interest payments and face value won’t change. But if you buy and sell bonds, you’ll need to keep in mind that the price you’ll pay or receive is no longer the face value of the bond. The bond’s susceptibility to changes in value is an important consideration when choosing your bonds.
U.S. Treasuries

These are considered the safest possible bond investments.

You’ll have to pay federal income tax on interest from these bonds, but the interest is generally exempt from state tax. Because they’re so safe, yields are generally the lowest available, and payments may not keep pace with inflation. Treasuries are extremely liquid.

Government agency bonds

These bonds are typically high-quality and very liquid, although yields may not keep pace with inflation. Some agency bonds are fully backed by the U.S. government, making them almost as safe as Treasuries.

Municipal bonds

These bonds (also called “munis” or “muni bonds”) are issued by states and other municipalities. They’re generally safe because the issuer has the ability to raise money through taxes—but they’re not as safe as U.S. government bonds, and it is possible for the issuer to default.

Stock Investments

You can own pieces of companies through stocks, giving your portfolio the chance to gain value over time. When you buy a stock, you own a piece of the company that issues it. There are several ways of classifying companies and their stocks.
  • If you buy a company’s stock, you become a part owner and you’ll generally make money if the company does well—or lose money if it doesn’t.
  • Depending on how established the company is, most of the money you make will come either through increases in share price or through dividend payments.
  • Larger companies tend to be more stable than smaller companies, but they also have less room for growth.

When people talk about investing in stocks, they’re usually referring to common stock. These kinds of stocks give you the opportunity to join in the success of public companies, and as such, they’re an investment that can really grow your portfolio.

Because you’re a part owner of the company that issues your stock, it’s pretty simple: For the most part, when the company makes money, you make money. (Conversely, of course, when the company loses money … well, you get the picture.)

There are a couple of ways you’ll see this part-ownership reflected.

First, the price of each share of stock can increase in value. If you buy 50 shares at $10 a share and then the share price increases to $15, you’re now $250 richer.

The company can also choose to issue a dividend to shareholders. Say the issuer of your 50 shares of stock announces a $2 dividend. That means you’ll be paid $100 (which you can use to buy more shares, if you wish).

Silver Investment

Precious metals such as silver have long been an alternative to traditional investments such as stocks and bonds. When times get tough or the economy faces severe inflationary pressures, some investors turn to silver to hedge their bets or to invest more defensively. Investors like silver for many reasons, but many see it as a store of value in uncertain times, while others see silver and other precious metals such as gold as protection against inflation. For this latter group, investing in silver is a way to be sure that they have a currency that can’t be inflated away by money printing or potentially destructive Federal Reserve policy.
Owning physical silver, either as coins or bullion, is a psychologically and emotionally satisfying way to invest in silver. You have possession of it and can use it, if necessary. And in some cases, it’s actually relatively easy to access. If the price of silver rises, you can make a profit on silver coins and bullion, but that’s the only way you’ll make money here, since the physical commodity does not produce cash flow, unlike a quality business.
Silver futures are an easy way to wager on the rising or falling price of silver without any of the hassles of owning physical silver. You could even take physical delivery of the silver, though that’s not the typical motivation of those speculating in the futures markets. Silver futures are an attractive way to play the silver market because of the high amount of leverage available in futures contracts.
If you don’t want to own physical silver directly but also want a lower-risk method than futures, you can buy an exchange-traded fund (ETF) that owns physical silver. You’ll have the potential reward for owning silver if the price rises, but fewer risks such as theft. An ETF that owns physical silver will deliver the return of silver prices minus the ETF’s expense ratio. ETFs offer another advantage, too. You’ll be able to sell your silver at the market price, and the funds are highly liquid. So you’ll be able to sell your funds at what’s likely the best price, and you can do so on any day the stock market is open.
You can also take advantage of a rising silver market by owning the stocks of companies that mine the metal. By owning a miner you can benefit in two ways. First, if the price of silver rises, the company’s earnings should rise along with it. In fact, silver miners’ profits will rise faster than the price of silver, all else equal. Second, the miner can raise production over time, also increasing its profits. That’s an extra way to win with silver, over and above just betting on the price itself.
If you’re not looking to do a lot of analysis on silver miners but still want the advantages of owning a mining company, you can turn to an ETF that owns silver miners. You’ll get diversified exposure to miners and lower risk than owning one or two individual mining stocks.

Real Estate Investment

Our investment strategy centers on the acquisition, rebranding, and operation of undervalued multifamily properties. We research and uncover properties that are mismanaged, undermarketed, and/or minimally maintained, and then rebrand them through renovations, more efficient management, and timely marketing. The result for our investors is an asset that quickly (and at times, dramatically) increases in value, while also producing a predictable monthly income, as well as favorable tax advantages.
Lusate offers our investment partners the opportunity to leverage shares of multifamily rental properties into a passive monthly income, without the associated day to day management of such. Our experienced investment team thoroughly evaluates properties to find assets that have vast potential but are currently devalued due to disengaged management. Once identified, we aggressively act on acquiring and improving the asset, with a proven property enhancement and management plan.
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