For those who don’t do their research, investing may seem akin to playing a roulette–all they need to do is place their bet and hope that Lady Luck will choose their asset and make it ultra profitable.
Let’s be honest: that’s not how investing works.
If your goal is to invest in luxury things, you’ll need to find luxury items that appreciate in value and will eventually turn into profit. This means that these luxury goods have to go up in value at a faster rate than inflation, and not be correlated with other volatile markets–this way your luxury investment will be the best hedge against any possible risks.
In this blog, we will look at some of the best luxury items to invest in and discover the most exclusive luxury items worth investing in.
4 Luxury things that appreciate in value
While the luxury goods market is very broad, not all assets can be considered investments. In fact, most popular luxury items can even be liabilities from the traditional investor’s perspective. After all, there aren’t many pre-owned goods that tend to grow in value in this world. Below are some examples:
Being a Rolex enthusiast, I would not have started this list with anything else. Investing in watches has been my passion for a long time, and one of the main reasons Investables exists–watches are some of the best luxury items worth investing in. Why?
First of all, the material they’re made of. Most luxury watches are highly durable, which means that they can withstand the passing of time and even a couple of dinners where you will be proudly showing them off.
Seconds, the scarcity. Rolex doesn’t overproduce their watches, far from it. If you want to buy a brand new Rolex GMT-Master II, referred to as ‘Batman’, you might have to wait in line for months, or even years before the Rolex representative calls you and tells you the good news. That’s why the secondary market for luxury watches is so popular, and buying a Rolex from a previous owner can be even more expensive than buying it from the store.
That’s why the average annual return of a Rolex watch is usually somewhere above 10%.
But it’s not just Rolex we are talking about. Brands like Audemars Piguet, Vacheron Constantin, and others also produce luxury items that increase in value over time. So, depending on your taste and budget, you can easily find luxury things to buy now that will increase in value if watches are your passion.
Can a piece of leather and fabric be an investment? Why not! In fact, designer handbags from brands like Hermes, Louis Vuitton, and Channel are definitely some of the best luxury items that increase in value over time.
All due to the big names and a supply chain that is very tightly controlled. For example, Hermes produces only 12,000 Birkin bags in a year. To compare, Rolex manufactures anywhere between 800,000 and 1,000,000 watches per annum.
The craving desire to own a Birkin bag creates enormous demand and price growth that can outperform the rise of some crypto–on average, Birkin bags are items that appreciate in value at about 14% per annum, while some other designer handbags have risen more than 84% in as little as 10 years.
While some people look at wine bottles as simply items to buy and drink, others consider them luxury things that go up in value. Sometimes this leads to wine fans simply buying twice as much wine–half to drink, and a half to set aside. Because what luxury items appreciate in value better than wine?
The original luxury collectible, vintage wine has long been a passion of many investors. Whether you invest in wine ‘en primeur’ or buy a rack of bottles, a properly chosen vintage, and the winery can bring you great profit–as the wine matures, its value can increase by more than 30% over the next five years, if not more! Of course, a collection of wine bottles will go up in value faster than a standalone bottle. Yet, even a single bottle of premium wine can be auctioned off at $100,000 if there is a suitable buyer for it.
Investing in art has increased greatly after the sale of Da Vinci’s ‘Salvator Mundi’ for $475,000,000 in 2017, making it the most expensive painting ever sold, and the highest increase in value for an artwork. Or for any other type of asset for that matter.
Fine art has always been considered luxury items that hold value. In times of inflation, art sales increase, which means that investors look to hedge against the possible risks of losing money, and decide to invest in art because they know about its tendency to appreciate in value.
Whether you choose to buy artworks of established artists or emerging talent, the luxury goods market for art can satisfy the taste of every investor. However, the artworks of emerging artists has a better chance of growing in value over time, if the artist is promising.
If you are considering art as an investment, make sure to check out our guide to investing in art for beginners. You’ll find plenty of valuable info there.
Aye, it’s pretty compelling to invest in luxury things that increase in value. But, as you can see, most of these assets can be very hard to come by. Add a hefty price tag, and you’ll be left in a pretty sour mood for the rest of the day.
However, you can always visit Investables and explore what items appreciate in value in our trending collections. More than that, you can always invest in your favorite assets and buy fractions with as much (or as little) money as you deem right.
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Frequently Asked Questions
Which assets from luxury brands hold their value best?
One of the best examples of luxury assets holding their value is a Rolex watch. Most pieces trade on the secondary market well above MSRP, and their value is constantly increasing at 10% each year.
What luxury items sell the most on the secondary market?
Watches, designer bags, and fine art are the assets that are most popular luxury assets sold on the secondary market. Due to tightly controlled supply, buying these assets from the brand take a lot of time, that’s why the secondary market is very popular for these asset classes.
Are there other luxury items besides watches and designer bags that go up in value?
But of course! Sneakers of famous basketball players, trading cards, and even jewelry also have a tendency of going up in value. The market of alternative assets is very broad, and every investor can find a type of asset to suit their interests and needs.