'Wealthy buyers switch from yachts to tangible assets with long-term value'


2015-06-26 11:54:08


'Wealthy buyers switch from yachts to tangible assets with long-term value'

Three interesting reports landed on Paul's desk this morning - here are some antidotes to the recession

In the first Sotheby's have announced their results for their fourth quarter ending December 31, 2009.

Now remember; we're in a recession... however...

Net income from the fourth quarteris the second highest in company history at $73.6 million.

Bill Ruprecht, President and Chief Executive of Sotheby's described the results as "outstanding" and that the "momentum has continued into 2010".

A major shift in spending habits...

Another report was from The European Fine Art Foundation (EFAF).

It highlighted a major shift in "Luxury spending habits".

It seems very wealthy buyers have been switching away from expensive cars, yachts and jets in favour of assets with long-term tangible value such as arts, antiques and unique collectibles.

EFAF refer to these as 'investments of passion' and comments that these markets have "performed far better than expected" during the economic downturn.

In 2009, the report says, high net-worth investors had"looked to find assets that had a more enduring value".

The report continues to say that "the most affluent buyers began focusing on intrinsic quality".

Out-performed inflation...

The third report came via Arts Economics.

Their survey of existing major collectors showed that "most felt that their investment in art had out-performed inflation and in many cases had done better than their investments in financial and property markets".

"Assets such as Art which offer long-term stability with potential for risk diversification will continue to gain more mainstream interest in the investment community".

My take on it...

It all backs our belief that carefully selected items of history have a valid place in a personal investment portfolio.

We know that more and more people are looking at unique collectibles.

We now have subscribers in 112 countries around the world.

Yet, regardless of financial incentives, our best advice remains to buy an item because you love it; because you feel passionate about it.

And buy the best you can afford...

I was once asked to fly to Europe to meet with a Russian billionaire.

He instigated the meeting, but could only spare one hour. As you can imagine his time was incredibly valuable.

We had a very pleasant lunch. I explained my theories on collecting, what to buy, what to look out for.

He shared the same philosophy and had a great eye for detail.

He went on to spend an average of 25,000 ($40,000)per month on rare stamps.

He'd purchase only the finest quality British stamps, and those from Commonwealth countries. He'd buy the mega-rarities, the best he could afford.

After a few months of doing business together he told me:

"I don't do it for investment. It is relaxing, I spend 30 minutes with my collection every week and I forget about the stress of business."

But I can tell you one thing: by focusing on top-notch material his collection is nowvalued atfar more than he paid for it.

There are many reasons why people collect.

Some do it for pleasure; others do it purely for investment.

We say mix the two. Owning a carefully selected piece of history is an appealing proposition.

And with the right knowledge and experience there are many avenues open to you.

I've taken the liberty to put my 5 favourite stock items on this link.

Buy one of these pieces and you'll own something that nobody else in the world has.

It's our belief that in the collecting world that is the first step to making a profit.

Finally, look out for Saturday's newsletter - we're giving you the inside info on a quick moving market where you can stillbuy unique itemsfor as little as 450 ($720).



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