Piece written by Mfanafuthi Mhlongo, Trive Financial Market Analyst
In the dynamic world of investment, where fortunes are built and legacies forged, and according to Benjamin Graham, a British-American economist and professional investor best known for his book The Intelligent Investor, “diversification has long been the cornerstone of success”. While traditional avenues such as property, stocks, and startups have been the bedrock of portfolios, and seems that the shift towards unconventional terrain is capturing the attention of investors.
Imagine your investment journey taking a detour through a world adorned with vintage wines, designer handbags, and cherished toys. This realm, often associated with opulence and prestige, has evolved into a domain of shrewd investment strategies.
- Navigating The Vintage Wine Connoisseur’s Path
Wine exchanges, online auctions, and the intriguing concept of buying “en primeur” offer avenues to craft a cellar of investment-grade vintages. Consider a record-breaking auction where a single bottle of The Setting Vines 2019 Glass Slipper Vineyard Cabernet Sauvignon fetched an astounding $1 million. Yet, the path is laden with complexities; understanding the impact of vintages on value and foreseeing trends in the wine world is essential.
- Designer Handbags: Where Fashion Meets Finance
Designer handbags, iconic symbols of status and style, have transcended their fashion origins to become investment treasures. Sotheby’s reports auction prices soaring for sought-after bags like Birkin and Chanel. A mere bag transforming into an appreciating asset might seem implausible, but according to the article from the Business of Fashion publication, the financial return on Chanel bags recorded an impressive 11.8% in 2021, and Birkin bags surged by a remarkable 38%. These fashion statements become much more—a savvy investment strategy that marries aesthetics and returns.
- Toy Collecting: Nostalgia Unleashed
Childhood dreams and cherished memories converge in the world of mint-condition toys. Collectors, driven by nostalgia, rediscover long-lost treasures or acquire iconic toys that eluded them in their youth. The allure is more than sentimental; original Barbie dolls selling for approximately €23,500 at auction in 2006, an original 1977 Obi-Wan Kenobi action figure from Star Wars in mint condition sold for €63,245 in 2022, and Super Mario Bros. NES cartridges achieving €548,000 on July 9, 2021, by Heritage Auctions in Dallas, Texas, illuminate the potential of toy collecting as a rewarding investment pursuit.
- The Renaissance of Fine Art Investment
Fine art, a time-honoured haven for wealth preservation, unveils its investment prowess. Galleries and auction houses witness an infusion of wealth, with €205,000 being the average spend on art and antiques in the first half of 2021, according to a report by UBS and Art Basel, which surveyed wealthy collectors around the world. Beyond aesthetics, art becomes a vessel to encapsulate substantial value in a compact form. A masterpiece like Paul Gauguin’s “When Will You Marry,” which commanded nearly €273 million, epitomizes the fusion of artistry and investment potential.
Jewellery, Watches, and Gems: Precious Portfolios
The investment stage expands to embrace the dazzling allure of jewellery and watches. Vintage watches have surged in value, complemented by the appeal of precious gemstones. Auctions feature staggering prices— in 2017, a 59.6-carat pink diamond called the Pink Star sold for €60.4 million at auction, while a 13.95-carat blue diamond called the Blue Moon of Josephine sold for €49.7 million at auction in 2016. Timepieces like a Jacob & Co. Billionaire watch, which was made of 18-karat rose gold and features 260 baguette-cut diamonds, was listed for a stunning €512,000 in 2022, while the Patek Philippe Grandmaster Chime 6300A-010 soldfor over €25.2 million at auction in 2019. These adornments become not just sparkling embellishments but investment assets that fuse luxury and finance.
- Classic Cars: The Art of Nostalgia
Classic cars masterfully blend nostalgia with artistry, offering a journey back in time for enthusiasts. Rare models like the 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe sold for over €120.25 million to a private bidder at auction in 2022, according to Mercedes Benz, are more than automobiles; they’re a symphony of design and investment potential. Classic cars, relished on the open road and revered at exhibitions, transform into tangible assets that appreciate both in aesthetic and monetary terms.
- Trading Cards and Comic Books: A Playful Investment Arena
Trading cards and comic books emerge as the embodiment of both playfulness and investment potential. According to a recent report by The NPD Group, the trading card market was worth an estimated €6.7 billion in 2021, up from €4.6 billion in 2020, while comic books witnessed impressive returns—”Amazing Fantasy 15,” the comic debuting Spider-Man, soared from the €91,000 it sold for in 2011 to selling for €3.08 million in 2021 as part of Heritage Auction’s Signature Comics & Comic Art sale. These investments resonate with collectors and enthusiasts alike, blending pastimes with profits.
- Sneakers and Digital Art: Modern Manifestations
Investment horizons extend to embrace modern phenomena. Sneakers, once casual footwear, now capture the limelight with record prices, like Michael Jordan’s €513,750 Air Jordan pair sold in 2020, at an auction by Sotheby’s, an auction house specializing in rare and collectable items. Meanwhile, digital art manifests in non-fungible tokens (NFTs), creating value through rarity and ownership verification.
Investing in Luxury Goods: A Journey Beyond Finance
The allure of luxury goods as investments extends beyond finance, creating a convergence of passion and prestige. These unconventional paths reinvent portfolios, transforming them into galleries of sophistication and intrigue. From savouring aged wines to adorning oneself with timeless gems, each investment unfolds as a chapter in an opulent narrative—one where returns manifest in tangible and intangible forms.
As the investment landscape evolves, the realm of luxury goods stands as a testament to the fusion of elegance and financial acumen.
Sources: Credit Suisse, Deloitte, Elite Traveller, Wealth Briefing, Business Insider, Barnebys, Bloomberg, Investing.com, UBS, Art Basel, NPD Group, Barron Report.
This material is provided for informational purposes only and does not constitute financial, investment or other advice. No opinion contained in this material constitutes a recommendation by Trive Financial Services Malta Limited or its author as to any particular investment, transaction or investment strategy and should not be relied upon in making any investment decision. In particular, the information does not take into account the individual investment objectives or financial circumstances of the individual investor. Trive Financial Services Malta Limited shall not be liable for any loss, damage or injury arising from the use of this information.
