Carla Passino wrote in Country Life (13th March 2013) about the Knight Frank’s Luxury Investment Index. Her conclusion is that passion-driven investments have significantly out-performed more traditional assets such as the FTSE 100 or the property market.
How assets appreciated in the decade to September 2012:
Gold 434%
Classic cars 395%
Coins 249%
Stamps 217%
Fine art 199%
Jewellery 140%
Prime central London property 104%
Chinese ceramics 85%
Watches 76%
Prime New York property 73%
FTSE 100 54%
Furniture -18%
Nothing tells the story of appreciating collectibles more than a pastel version of The Scream 1895 by Edvard Munch. It fetched $120 million at Sotheby's in New York last year, setting a new world record for a work of art sold at auction. Experts had expected the masterpiece to break new ground since its presale estimate of $80 million was the highest ever listed at Sotheby's.
Edvard Munch
The Scream, 1895
79 x 59 cm
Sold at Sotheby’s New York in May 201279 x 59 cm
I am assuming for the purpose of this post that Knight-Frank's asset-appreciation figures are accurate and universal. And very useful to know! But there is something uneasy about believing that “if you follow your heart, the money will come”.
A passion-driven investment seems like a contradiction in terms. I am saying it because passion has to do with the love of collecting, usually based on aesthetic pleasure or historical importance. One sentence will make that clear. “Stamps are quietly building a following among wealthy investors, many of whom are not actually collectors”. If those wealthy investors are buying stamps because of the stamps’ rate of appreciation, and not because they love collecting stamps, where does the passion come in? I may as well buy pork bellies, as long as pork bellies are appreciating rapidly.
My collecting passion is for 18th and 19th century French, German, Austrian, British and Czech porcelain. But if these art objects are not appreciating very well, I should probably lose my passion for old porcelain and simply invest in another area of collecting. Or I should separate passion from investment and clearly differentiate between the two. In the latter case, “following one’s heart and the money will come” is not meaningful.
My collecting passion is for 18th and 19th century French, German, Austrian, British and Czech porcelain. But if these art objects are not appreciating very well, I should probably lose my passion for old porcelain and simply invest in another area of collecting. Or I should separate passion from investment and clearly differentiate between the two. In the latter case, “following one’s heart and the money will come” is not meaningful.