New research: Collectibles have outperformed shares since 2005

paulfrasercollectibles

2015-06-26 13:35:39

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New research: Collectibles have outperformed shares since 2005

Research from Coutts reveals there's money to be made in collectibles - but 'tread carefully' says Paul

Passion investments. Treasure assets. Collectibles

Call them whatever you wish. They have the potential to make you serious money.

Private bank Coutts this week published its Coutts Index, which revealed that "passion investments have risen 77% since 2005, outperforming shares".

And if a respected name such as Coutts is saying collectibles can net you profits, it's time to take it seriously.

Headline figures include:

Classic cars up 257% since 2005

Classic watches up 176%

Traditional Chinese artworks up 163%

Jewellery up 146%

In contrast, the MSCI All Country Equity Index was up just 53% during the same 2005-2013 period.

It's exciting, and hugely encouraging if you're thinking of adding some diversity to your portfolio.

How to invest successfully

Yet, here's the thing.

Yes, I've long been a champion of collectibles as investments - it is how I've made my livelihood after all.

Yes, this is a vindication of everything I've been saying over the years.

Yet for all the positivity, I actually find these headline figures a touch dangerous.

Because what these numbers don't illustrate are the variations within each sector. Not every classic car has risen in value since 2005. In fact some, such as the 1970 Plymouth Cuda, have fallen in recent years.

You could find similar examples throughout the collectibles sector.

I'm concerned that someone reading this will take a speculative punt on a collectible without taking the necessary measures to ensure they are making a sound decision.

So if you want to take advantage of the undoubted profit potential the collectibles sector offers you, what's the answer? What do you do to avoid buying the wrong piece?

If possible, focus on the rarest, most exclusive end of the market. Yes, these pieces will cost more, yet it's worth it. Historically, unique or ultra-rare pieces that are hugely desirable have shown the greatest price rises.

It's why James Dean autographs, of which there are very few, have grown in value by 18.8% per annum since 2000 and are now valued at 15,000 ($24,600). And it's why, on the other hand, autographs from George Clooney, who is well known for agreeing to most signature requests, can be picked up for around 20 ($33).

Ask the experts

In my opinion, among the bestmoves you can makeis to give my team a call - we have more than 250 years' combined experience in the collectibles field.

We can discuss your options, and point you in the direction of top-grade items of our stock - all with no obligation of course!

More than investing

Yet with all this talk about investing, we're in danger of forgetting there is another side to collecting too.

It's not simply about making money.

Mohammad Kamal Syed, the head of strategic solutions at Coutts, sums things up nicely.

"The benefit is more than just profit. Owners can bond with like-minded people in an elite network, with assets offering escapism and a chance to re-enact history," he says.

"Indeed, there is one thing that the Coutts Index, for all its robustness, can't measure - and that is happiness. The idea of someone paying $50m for an uncomfortable old car, with windows that don't work and a noisy engine, seems illogical. In many ways it is. But the happiness such a car can bring is immeasurable."

Well said.

Until next week,

Paul

P.S Click here to view all our stock for sale.

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