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Have Luxury Goods Caught Your Eye? Here’s What a Financial Advisor Thinks About This Investment
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The super rich spend a lot of money luxury goods Because they are hard not to love. But are rare whiskeys, designer handbags and other expensive items also good investments?
High-end watches and expensive art can be smart additions to your portfolio, but only if you know what you’re doing. Here’s what you need to consider when investing in luxury assets.
Main points
- Invest in luxury goods with a track record of appreciation.
- Build a strong traditional portfolio before considering luxury goods as a secondary investment.
- Success in luxury investing requires expertise and connections – make sure you have the knowledge to buy, sell and validate assets correctly.
What I tell my clients
Having something makes you feel satisfied tangible assetsespecially when the market is uncertain. But if you don’t have financial security, you shouldn’t consider luxury investments. You should first create a ETFA portfolio based on stock and bond investments and then consider using alternative assets (e.g. venture capitalprivate equity, cryptocurrencies) and luxury goods may appreciate over time.
Focus on categories with a proven track record and avoid buying them simply because they are expensive or popular. Pieces of historical significance, limited availability, or unique craftsmanship are your best bets. Additionally, be sure to develop adequate market knowledge and industry connections. Without them, it will be difficult to find qualified buyers later.
Today’s market shows that art, jewelry, and watches are appreciating in value, while previously popular investments, such as rare whiskeys, are declining.
hint
Before purchasing luxury goods, do your research and make sure there is a strict identity verification process.
According to the agency, investing in luxury goods can bring the following benefits Knight Frank Wealth Report 2024:
| Knight Frank Luxury Investment Index Q4 2023 | |
|---|---|
| Luxury goods category | investment performance |
| Art | +11% |
| jewelry | +8% |
| watch | +5% |
| furniture | -2% |
| handbags | -4% |
| classic car | -6% |
| rare whiskey | -9% |
bottom line
Luxury goods can be a great way to diversify, but making them your primary focus is risky. Anyone considering these investments should start with a solid traditional portfolio first. Once you’ve established financial security through these more traditional means, you can consider expanding into luxury items with a proven track record of appreciation.
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