With luxury goods funds, investors can invest widely in the luxury sector. However, the choice is so far very limited and there is no guarantee that the prices of luxury goods will rise in the future.
The equity markets will remain bumpy in 2021 as well. The reason is the ongoing Covid-19 pandemic. Until a vaccine against the corona virus is widely available, there will be restrictions in many countries. Some companies are therefore likely to slide into bankruptcy and file for bankruptcy. A severe recession thus appears inevitable. Investors do not have to give up, however, because there are some investment alternatives that offer the chance of a good return. These include goods in the luxury segment such as cars, diamonds and art as well as wine, coins, furniture, whiskey, watches and handbags.
A prerequisite for investment success, however, is that investors are willing to take risks and invest large amounts of money. A long-term breath and of course a certain passion for these goods are of course also part of it. Anyone who wants to invest in old, classic cars should be well versed. Because the market for historic cars is not exactly transparent. This is because the purchases and sales do not take place via stock exchanges, as is the case with stocks, but mostly via private advertisements or trade fairs, and less often via auctions. However, there are indices that create transparency in the classic car industry and can provide an indication of market development.
How investors get prices
One of these indices is the Hagi Top Index, which is an overall market measure for the price development of exceptional historic automobiles on the basis of completed transactions. It currently comprises 50 models from 19 different premium brands. This includes the McLaren F1, a super sports car that was built only 106 times between 1993 and 1997. With a price of around 19.81 million US dollars, it was considered the most expensive classic car worldwide in 2019.
But there are also sub-indices that provide current market information for vehicles such as Porsche, Ferrari, Mercedes-Benz and Lamborghini. The market for classic cars is currently in a state of upheaval. After significant price increases in recent years, prices for historic cars are falling continuously. This is due to the fact that most of the owners of classic cars come from Germany, the Netherlands, Great Britain, Belgium and France. The relative weakness in these economies has led buyers to become more cautious. The Hagi Top Index lost 7.0 percent within three years, and 7.4 percent within one year.
The full article “Alternative investments wanted”. can be found in the January issue of Versicherungsmagazin. Either in the PDF archive or in the eMagazine.
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Author (s): Carmen Mausbach