When it comes to investing your hard-earned cash in worthwhile asset classes, it can be difficult to know where to begin. The internet is a minefield of conflicting and ever-changing advice, particularly in these tumultuous times. But it really needn’t be so complicated or arduous. Investing isn’t just about crunching numbers and watching stock tickers. It can also be about indulging in your hobbies and the joy of ownership. Enter investments of passion, also known as luxury investments. From watches to whiskey, these alternative investments offer a unique blend of pleasure and potential financial gain.
What makes a luxury investment?
According to Andrew Shirley, Head of Luxury Research at Knight Frank, there are two key components to a luxury investment. “First, there need to be similar elements to any other investment market – liquidity (a community of like-minded collectors really helps); accessible trading platforms to allow you to buy and sell; the potential for values to rise over the long term (that’s why we don’t put private jets or superyachts in this category); and, preferably, some element of data that allows market performance to be tracked.”
Secondly, and most importantly, there must be an element of pleasure involved in collecting your asset class of choice. “If no passion is involved, if the joy of ownership doesn’t make up for any potential drop in value, then it’s just another investment,” says Shirley.
Scroll on to discover five smart investments that, unlike stocks or bonds, might actually bring you some joy.
For art lovers, developing an art collection offers a reliable and often lucrative way to invest any spare change you may have lying about. Plus, it serves as great dinner party conversation fodder, especially if you’re drawn to a particular artist or movement. These days, a new generation of buyers acquiring art in different ways is helping bring greater equity to the market. The focus is increasingly on female artists and those born after 1980, and unsurprisingly, NFTs and digital art are gaining traction. To stay ahead of the curve in this promising market, keep an eye on emerging artists, attend art fairs and build relationships with galleries.
While traditional clear diamonds may be a girl's best friend, coloured diamonds are a collector's dream. According to data from the Fancy Colour Research Foundation, pink diamonds have seen the strongest price growth over the long term, while yellow diamonds have more recently been rising in popularity. Due to their scarcity and desirability, coloured diamonds have a track record of holding their value and appreciating steadily, making them a smart addition to any investment portfolio.
“There are two types of collector,” says international watch specialist James Marks. “You’ve got the very traditional collector who goes to a showroom and auction house and buys with their eyes and their heart. And if the world goes to nothing, they don’t care. They’ve got their watch and they love the aesthetic of it. At the same time, you’ve got a situation where people are looking to invest. They say ‘I want something that I retain value in, and that has an upside. But it’s very tricky, because watches are so subjective.” Iconic designs will always retain value. Recently, vintage Rolex professional watches have been dominating the collector market: in a period of 10 years, the Rolex Daytona Paul Newman John Player Special Dial increased in price by 571%, to £580,000.
For dedicated petrolheads, classic cars offer a thrilling blend of nostalgia, craftsmanship, and mechanical ingenuity. Whether you're passionate about vintage Ferraris, muscle cars from the '60s, or elegant Rolls-Royces, investing in classic cars allows you to own a piece of automotive history while potentially earning significant profits. According to experts, the 25 classic cars that have increased the most in value in the past 12 months include all the cars you’d expect: the gold-standard 1960s V12 GT Ferraris, the Bentley R-Type Continental and the Aston Martin DB4 Zagato. But, interestingly, the list is now led by a new champion: the McLaren F1. Values of both F1 LM and ‘standard’ F1 models have been soaring with the recent surging of demand.
Wine and whiskey
Raise a glass to profitable investments with fine wine and whiskey. Whether you're passionate about Bordeaux blends, single malt Scotch, or small-batch bourbons, investing in premium wine and whiskey allows you to savour the flavours of exceptional craftsmanship while potentially reaping financial rewards. As these libations mature and become increasingly scarce, their value can appreciate significantly, making them a delicious addition to any investment portfolio. Cheers to that!
Become a Gentleman’s Journal Member?
Like the Gentleman’s Journal? Why not join the Clubhouse, a special kind of private club where members receive offers and experiences from hand-picked, premium brands. You will also receive invites to exclusive events, the quarterly print magazine delivered directly to your door and your own membership card.