has grown by 17% in the last year, and by 490% over the last decade, making it by far the fastest growing asset class on the KFLII. A Ferrari 250 GTO became the most expensive car in the world in 2014, when one was sold for over $38 million in 2014. Since then, it’s been rumoured that others of the existing 39 have traded hands at or over $40 million in private transactions between individual collectors. Besides this, Jaguar, Porsche, and McLaren all had new all-time-high prices set for their respective makes, all above $10 million. Jewel collectors are breaking records Jewellery has grown 4% in the last year, and 156% over the last 10 years. This continued upward trajectory was marked by the record 48.4 million dollar bid that The Blue Moon, a fancy vivid blue diamond, received at auction in November. This makes it the most highly valued gem or piece of jewellery in history. Art is holding its own While art might not be the fast growing juggernaut that luxury cars clearly is, it’s a timeless classic that isn’t going anywhere soon. With respectable 4% growth in the last year, and an impressive 226% in the last decade, art remains a financially viable investment. Most notably, Paul Gaugin’s When Will You Marry?, a painting of two Tahitian girls, was sold for $300 million in Qatar, making it the most expensive work of art ever sold. Another priceless work of art, Picasso’s Women of Algiers, sold for $179 million in May. Wine is growing rapidly The Knight Frank Fine Wine Icons Index showed that wine is up by 5% this year. According to Nick Martin of Wine Owners, many investment-
grade Bordeaux wines are now recovering well from the blow that was caused by the sudden drop in demand from China. Over the last decade in general wine has also performed very well, growing a total of 241% during that period. Furniture, on the other hand... Unlike nearly all other assets on the KFLII, furniture investment actually shrank by 6 percent. For passionate investors, however, that didn’t result in any serious issues. Despite this general setback, furniture secured a new record at auction when a Marc Lockheed Lounge sofa sold for $3.7 million this last April.
What About the Economy? The global economy in the past 10 years hasn’t been particularly stable with the American housing crisis in 2008, the sudden slowdown in China, and the economic crisis in the EU. Because of this, it might come as a surprise to less experienced passion investors that the luxury investment market has been positively booming during this entire period. Despite ongoing issues in established and emerging markets, wealthy collectors are continuing to thrive. Contrary to what many might expect, this is not a fluke. These types of investments typically do very well during times of economic uncertainty. This is because tangible and durable investments like jewellery, coins, cars, and paintings will appreciate in value as they get older, or at the very least retain their value without depreciating. Ultrahigh net worth individuals (UNHWIs) in Europe are much more likely to currently own a collectible than their counterparts in Asia and Latin America. Rising demand in those emerging countries as the UNHWIs
there work to stabilise their wealth is a large part of what’s driving the growth of passion investments globally. It’s a Great Time to Get Involved There are a variety of reasons that growth continues unabated and bids on these types of items break records year after year. As they get older, their history and relevance in their respective collector community grows. Furthermore, the growing number of passion investors with an interest in these items is increasing rapidly, and not just because of growing global wealth. Beyond simple economics, globalisation is driving a global cultural homogenisation that makes these traditionally western pursuits more accessible and more relevant to potential investors all over the world. Of course yachts are unlikely to become very popular in landlocked countries, and private jets will always be most popular in places where they are most practical. Other goods, however, like luxury cars, wine, precious gems, and other collectibles aren’t strongly restricted geographically, and are likely to continue rise in popularity all over the world. While this process is still ongoing, we can expect the prices on the world’s most valuable collectibles to continue to rise rapidly. Passion investing is a great way to marry your personal interests to your investment goals. If you’re not a member of the world’s super wealthy elite, you don’t have to don’t let that stop you. It might take $40 million to get your hands on a Ferrari 250 GTO, but you don’t have to start there. Look into the things you’re passionate about to see what kinds of investment opportunities might await within your means.
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