Luxury as an asset class
Beauty, passion and value are often hard to combine but in the context of a diversified portfolio, luxury goods can be as profitable as they are enjoyable.

What you need to know

  • Luxury goods have been in the crosshairs of investors for the last few years, driving prices up and creating handsome returns.
  • There are a number of luxury investments that are great value stores, some may even be recession-proof.
  • When investing in luxury it is crucial to distinguish between hype objects and store-of-value pieces.
Luxury & Lifestyle Updated on October 21, 2022

Lifestyle managers are confronted daily with the purchasing wishes of clients and if experience has taught us anything, it’s that the highest category of luxury tends to be recession-proof and doesn’t move with the market. However, there is a category of luxury that follows the market simply because these items don’t get bought as investments or stores of value but more to display status by those who have recently come into some money.

To most people, buying luxury is not about how the item makes them feel, but rather how it makes others feel who see them wear it, use it or drive it.

Investing in luxury assets

There are a number of brands and products that have performed exceptionally well over the last decade as they doubled and tripled their market value over time. Looking at the current market (mid-June 2022), investments have corrected heavily over the last six months. The S&P 500 is down 22%, the price of Bitcoin is down 70%, but the price of a Hermes Birkin Bag remains unchanged – valued at around twice its retail price. The value of many Patek Philippe watches is still sky high, trading at multiples of 3-4 times compared to the store price regardless of falling stock markets.

About the Authors

Tim Daum

Tim Daum

Lifestyle Management Services

Tim Daum is a lifestyle management expert and is the co-founder of Veltracon Lifestyle AG, an agency servicing high-net-worth individuals.

Connect with Tim Daum

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