Some investments are considered high risk due to their ability to increase and decrease in value dramatically and very quickly. However, not all investments have to be so and many are looking at alternative investments perceived to be somewhat ‘safer’ than your traditional stocks and shares.

Among them are assets like luxury watches, classic cars, vintage wines and fine art, many of which can appreciate significantly over time to create a nice little nest egg for their owners in the future.

The supply and demand of luxury items as well as how much people are willing to pay for them is fundamental to determining an assets value. However, when investing in luxury it is crucial to distinguish between hype objects and store-of-value pieces.

We look at some of the luxury items growing in popularity as alternative investment choices for investors.


Luxury Watches

Appreciating luxury assets - luxury watches

A luxury watch can make a fashion statement and a sensible investment, with some watches holding a lot more value than others do. Investing successfully in watches requires more than a healthy bank balance; you will need a good understanding of the luxury watch market and the ability to distinguish quality craftsmanship.

Premium or rare models by manufacturers such as Rolex, Omega or Cartier create timeless pieces that can regain and often exceed their original price tag. Before you make a purchase ensure the watch is in excellent quality condition and comes with its original packaging and paperwork, as this will all influence the asset value.

Handbags

Appreciating luxury assets - luxury handbags

A woman can never have too many handbags. However, which brands provide the most worthwhile investment?

If you are buying a handbag as a future investment then the old saying of ‘quality over quantity’ applies to turn a tidy profit.

Designer bags made by brands such as Chanel, Prada, Balenciaga, Louis Vuitton and Hermes hold their value due to the impeccable craftsmanship, quality of materials used and the limited amount of timeless styles created.

Designer Shoes

Appreciating Luxury Assets - Designer Shoes

It is hard to think that your favourite pair of designer heels could increase in value even once worn, but some can. The expert artisanship, elite materials and cutting-end trend appeal can make certain styles of designer shoes increase their resale value.

The Christian Louboutin Pigalle stilettos with their signature red soles are an investment you can’t go wrong with. This classic pair of designer pointed toe heels never go out of style due to their classic and youthful design.

Christian Louboutin are consistently among the top ten designer brands that hold their value.

Sneakers

Appreciating Luxury Assets - Sneakers

Whilst it takes a certain type of person to make an investment in a pair of sneakers, those who do and have the willpower to refrain from wearing their plush purchase, have the ability to make a healthy return.

It has been predicted that the sneaker market will reach $120 billion by 2026. So for those keen to partake in this alternative investment, invest in limited editions of high-end brands and then leave them in the box and guard them to protect what could be a fortune in a few years’ time.

Vintage Wines

Appreciating Luxury Assets - Vintage Wine

Have you ever considered investing in wine? A case of bottled up goodness can produce a decent profit providing you pick a winning vintage.

However, investment-grade wine is more likely to appreciate over time so it is a long-term investment.
The reputation of a wine producer will have a huge impact on a wine’s potential for appreciation.

Weather patterns, harvest yields, the vintage, and consumer trends are some of the factors that can affect the value of your prized wine.

Classic Cars

Appreciating Luxury Assets - Classic Cars

We have all heard the saying that a car’s value depreciates the minute it is driven out of the showroom, but classic cars are a completely different class and can gain value due to their rarity, performance or special attributes.

In fact, some classic cars can provide a better long-term return than some art and high value real estate.
Limited editions and imported cars are highly sought after amongst wealthy classic car collectors.

However, the level of financial gain you stand to make depends largely on choosing the right model, which is in great mechanical shape and has flawless paintwork.

Fine Art

Appreciating Luxury Assets - Fine Art

Investing in art should be both enjoyable and rewarding, and for those art enthusiasts there is a huge selection from which to choose.

For the savvy art buyer, art can be a massively profitable venture with the potential for incredible returns.

There are three main categories of artists to consider when investing in art: emerging artists, established artists and blue chip artists.

Signed and numbered limited editions and purchasing using auction houses, artists direct or galleries offers assurance in respect of authenticity.

Fine art is a long-term investment so buy something you love that is a signed original, and be sure to obtain certificates of authenticity and retain proof of purchase. Finally, have the investment protected in a quality frame and make sure it is insured!

Gemstones

Appreciating Luxury Assets - Gemstones

Precious gemstones are a timeless investment with no two gemstones ever the same.

Rare gemstones that are in pristine condition and come with their original supporting paperwork can be a worthy investment. However, they do not come with a small price tag and knowing which ones are worth investing in is crucial. There are many factors to consider when purchasing gemstones such as the carat mass, clarity, colour and cut quality (also known as the 4Cs).

In general, the demand globally for fine gemstones far exceeds the current supply, which is why they increase in value over time.

Some gemstones worthy of investment include the Diamond, Ruby, Blue Sapphire, Emerald, Spinel, Tsavorite Garnet, Spessartite Garnet, Alexandrite, Jadeite Jade, Imperial Topaz and Paraiba Tourmaline.

Renowned for being a girl’s best friend, Diamonds have been joined by Pearls. In fact, in recent year’s auction houses such as Christie’s have sold pearl jewellery far exceeding the value of other gemstones. The most valuable and expensive pearls on the market today are the South Sea pearls, which naturally occur in shades of white and gold.

Books

Appreciating Luxury Assets - Rare Books

Whilst we have always been told that books are an investment in ourselves, they can be just as strong of financial assets as mental ones.

For a book to be considered valuable, its demand must far outweigh its supply or the demand for it in the future.

The value of a book is often determined by its rarity i.e. first editions, first prints, first issues, first books (of specific authors) etc. Unless a later book became a huge seller, an author’s first book will always tend to be the most valuable. This is typically because a first book is usually released with a small first print run.

Signed copies will also always be worth more than unsigned copies. The condition of a book is also important.

Some of the most valuable books that can really earn big figures are harder to locate, they tend to be bought/sold at auction or via dealers, which is why classic book investors tend to build their own small and personal network of specialised dealers.

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