It seems it pays to enjoy the finer things in life: luxury assets such as art, wine and cars have often outperformed stocks and bonds in 2018, according to the Wall Street Journal.
Some High-End Purchases Have Tripled in Value in Just 10 Years
Investments in art made average gains of 10.6% in 2018, according to Art Market Research’s Art 100 Index, and wine saw a 10.2% gain, according to the Liv-ex 1000 index, the publication writes. Brexit helped the wine market, since a weaker sterling — the core currency in wine trading — meant international buying opportunities, according to the Wall Street Journal. Additionally, the Fancy Color Research Foundation found that high-end diamonds gained 0.4% in the first three quarters of 2018, the publication writes.
On the other hand, global stocks plummeted toward the end of 2018, with investments in the S&P 500 losing 5.1%, while cash equivalents gained 1.9%, and gold losing 2.2% over the course of the year, according to the Wall Street Journal. However, analysts predict that both trends could flip in the coming months, the publication writes.
The luxury-car market saw an expected correction in 2018 after the high investment that came with the 2008 crisis, Dietrich Hatlapa, director of Historic Automobile Group International, tells the Wall Street Journal. That said, cars are the luxury investment that performed the best over the past decade, gaining 289%, according to a Knight Frank report, the publication writes. Meanwhile, there was a 182% increase for coins, 147% for wine, 125% for jewelry and a reduction for both Chinese ceramics and antique furniture, according to the Wall Street Journal. Much of the growth in luxury goods has been attributed to emerging markets, which means they are vulnerable to currency fluctuations, the publication writes.