The luxury goods market outperformed stocks and bonds in 2018
The Wall Street Journal reports that the investment market for luxury assets, such as wines, works of art, classic cars and colored diamonds, has outperformed the market for stocks and bonds. People are constantly looking for investments, and owning something tangible is reassuring. According to “Art Market Research’s Art 100 Index”, those who invested in art at the beginning of the year averaged a gain of 10.6% at the end of November 2018. In November, at the Christie’s New York auction house, a David Hockney’s painting sold at 90.3 million US dollars, a record price for a living artist.
For rare and collectible wines, there is also an annual price increase of 10%. Interest in traditional Bordeaux has declined in favour of Burgundy wines. The high-end diamond market remained stable, with a gain of 0.4%. This market, which has very little volatility, allows you to diversify your portfolio. Those who invested in the S&P 500 at the beginning of 2018 lost 5.1% based on the total return on investment. Those who held gold lost 2.2%.
On the other hand, the market for luxury, rare and classic cars fell slightly for the first time in 10 years. According to the report published by Knight Frank, the luxury car market was the most lucrative investment market over 10 years, yielding gains of 289%, compared to coins at 182%, wines at 147% and jewelry at 125%. Note a significant decrease for the same period in antique furniture and Chinese porcelain.
There is always a risk in holding “alternative” investments. The market can rapidly change according to trends and fashions. Analysts believe that emerging markets represent a significant part of demand growth for luxury assets, leaving prices vulnerable to fluctuations. Note that the mentioned results reflect the US market. However, Evolia Transaction’s experts and collaborators confirm that the trend is similar in Canada.