Forget the Fed, Buy Film Royalties Instead

Jun 08, 2016

With the Federal Reserve (The Fed) holding interest rates low and dominating the conversation in the markets, too many people are missing out on this dividend-gushing asset that is making ordinary investors a lot of cash these days...


Turn on CNBC this morning, and you'll see the head of the Fed, Janet Yellen, talking about interest rates.

Open the Wall Street Journal.

You'll read speculation on how many times the Federal Reserve could tighten monetary policy in 2016.

All this interest- rate speculation is part of a broader problem with the markets — and the biggest problem with the financial media.

For the last seven years, statements and policy by the Fed have driven 93% of the stock markets gains and losses in that period, according to Brian Barnier, an economist and principal at ValueBridge Advisors.

Meanwhile, talking heads spend more time barking about interest rates than they do about real investments that can outperform the S&P 500.

All this, while the Fed has kept interest rates well below normal levels for a decade.

It makes it harder for investors to find reliable investments that aren't subject to the whims of central bankers.

But today, we're going to discuss an asset that is poised to provide strong cash yields and value upside for years from one of the world's hottest industries.

It's just one amazing quality of the royalty business.

Music & Film Royalties — Cash for Must Have Assets

Investors should ignore what the Fed is doing and focus on assets that provide appreciation potential and strong yields regardless of what the central bank does with policy.

There are a few industries out there that create “must-own” products.

You know, the things that are recession proof and will always be in high demand.

Food, electricity, housing, healthcare, and transportation are must-own products that people buy in any economy. They'll always be the havens of “must own” products when people start looking at their budgets each month.

But investors easily forget just how recession-proof the entertainment industry is.

Human beings demand entertainment — lots of it — in any economy.

Even when the U.S. economy was falling off a cliff in 2008, movies were still debuting to $100,000,000 opening weekends.

Technology has also made music and films more affordable for the average consumer, and entertainment is a must have product in today's world. Two decades ago, you had to purchase all your music on compact discs.

Now, you can download and stream thousands of songs in your pocket, any time... anywhere.

Firms like Netflix Inc. (Nasdaq: NFLX) and Amazon.com Inc. (Nasdaq: AMZN) continue to see explosive growth even though consumer spending and wage growth continue to fluctuate and generate new economic concerns.

But it's not just the recession proof nature of entertainment that should make investors mouths water when they're looking at investment opportunities.

It's also the staggering returns that can be realized on a single piece of intellectual property or a portfolio of different assets.

Own the Rights, Forget the Federal Reserve

Certain film royalties can offer an investor returns on investment that are difficult to rival. Take for example a recent auction where one smart investor purchased royalties tied to the music played in popular comedy films by the hysterical Farrelly Brothers.

The portfolio entitled the owner of the royalties to get a check whenever these films are downloaded, streamed, purchased, and watch on television.

And these movies are comedy classics, the kind you regularly see on HBO, Comedy Central and Sunday afternoon marathons across a wide spectrum of channels.

Based on the previous year's royalty streams, this asset was generating a 19.67% yield. And over the previous four years, returning its owner an average of more than $14,000 in cash royalties annually.

These are the types of yields that investors don't want to wake up from when they hit their dreams.

The best part: You can get in on this action by learning more about the marketplace and how easy it is to get started making real money on real alternative assets.

There are two platforms that allow ordinary people to invest in these assets. The first is Music Stock Exchange, which requires individuals to be residents of Tennessee.

The other platform investors should educate themselves on is Royalty Exchange, which hosted the auction of song rights to the Farrelly Brothers films.

Take a few minutes and read this to get a better understanding of how this unique alternative asset works by signing up for updates at Royalty Investor.

Who cares about interest rates when you can make a big profit for a song...