Classic cars, gold and jewelry are NOT a waste! Knight Frank says these are better investments than high end property or the FTSE

If, like me, you are of the opinion that no matter how much fun and how appealing to the inner geek/grown-up child/socially challenged motoring and technology enthusiast performance cars are, they are ultimately a waste of money and a completely depreciating asset, Knight Frank’s report may make for very pleasant reading indeed.

Far from viewing what are often considered to be frivolous and lavish items of luxury, global real estate consultancy KNIGHT FRANK LLP has conducted research which indicates that classic cars, jewelry and gold are better investments than high end property, or stocks in usually rock-solid FTSE-listed companies.

Good news for car enthusiasts! 

Let’s be honest, most of us FX industry and fintech executives fight an inner battle with ourselves, because we are part of an industry which is both technologically advanced and appeals to our interests in all things innovative (which is where the performance cars appeal) and yet provides investment products via the technology (which is where our cautious side fits in), hence because of this dichotomy, there are many who yearn for the thrills and satisfaction of owning a classic car, yet cannot justify it as a good investment.

The Knight Frank survey found that 63% of wealthy investors which participated in the research buy luxury assets because of a passion rather than to make a return on their money, however, a surprising 23% invest in such luxury items because they genuinely believe that it is a safe haven for their money.

Knight Frank concurred that, over the last ten years, its own Luxury Investment Index which includes asset classes such as performance cars, stamps, coins, art, wine, furniture and jewelry, has beaten the FTSE100 index (excluding dividend reinvestment), and has also outperformed London properties.

Over the last year, the Knight Frank Luxury Investment Index rose 10% compared with a rise of only 1% at the top end of London’s housing market.

Top end London homes are often prime real estate around the Knightsbridge area, and are now the subject of vast basement excavations which house every trapping favored by the nouveau riche oligarch, pop singer or Middle Eastern prince to the point of causing an entire house to collapse in Barnes, SW London yesterday.

The property on The Terrace, overlooking the Thames, suddenly imploded into itself, something that a 1960s Corvette Stingray or Jaguar E-Type is quite unlikely to do.

So much money has been poured into specific London property over recent years, with the view that it can only increase in value, that parts of Central London are 10 times more expensive to live in than reasonably middle-class areas of Greater London.

Whilst the solidity of investment in prime real estate is still valid, the upward direction is not as sharp as those who considered themselves prudent investors had perhaps thought, if this report is to be taken seriously.

James Knight, group director of Bonhams motoring department, said the biggest buyers in the market are from the US and Europe.

Mr. Knight stated yesterday that Chinese buyers cannot import secondhand cars into the country so the demand for classic cars relies solely on the free markets of North America and Europe.

Those of us with the means or will for investment in luxury products can perhaps enjoy the potential growth in value as well as the product itself. Many avantgarde fintech executives have rallied to buy future classics that represent breakthroughs in technology. Gold-i CEO Tom Higgins was one of the first customers in the UK to take delivery of a Tesla Model S. A true car enthusiast, Mr. Higgins’ purchase may have been as shrewd as it was enjoyable.

Knight Frank’s Andrew Shirley, author of the report, stated

“A Hong Kong-based billionaire set an all-time record earlier this month by paying £32 million for the Blue Moon diamond and strong demand for coloured stones helped Bonhams set a new per-carat record for a spinel, when it sold the 50-carat Hope Spinel brooch for £962,500 in September.”

Despite my life-long enthusiasm for cars, it would take some serious evidence and conviction, as well as nerves of steel to prize me out of my high-equity home and 15 year old near-valueless Oldsmobile and look at things the other way round, but for those with the will, the means and the passion, Knight Frank’s report shows that investing can be fun as well as sensible.

Featured Photograph: Andrew Saks-McLeod reassesses the viability of investing in specialist cars over property.