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Sunday, 19 April 2015

Classic cars as an alternative investment

Stocks and shares aren’t the only option for investing savings. Classic cars, vintage watches and fine wines are just some of the profitable ways to prepare for the future.

Traditional investment vehicles have taken a pounding in the last seven years and could become more unstable next year given Eurozone stagflation, setbacks in Japan, a debt-ridden China, oil-price collapse and diminishing returns from G7 monetary stimulus.

However, uncertainty in the markets is making the world of alternative investment increasingly attractive for those seeking returns on their cash. And let’s face it, a 1950 Ferrari 166 Inter Vignale Coupe and a case of Chateau Latour are sexier than a wad of share certificates!

According to Knight Frank’s Luxury Investment Index, alternative or “passion” investments such as fine art, antiques, classic cars and fine wine have outstripped the FTSE100 in the last decade.

Classic cars have proved particularly profitable. The Blue Chip index of classic cars, compiled by specialist Hagerty, which is made up of the 25 most sought after post-war cars, has more than doubled since the start of 2010.

1964 MGB Roadster pull-handle

Between 1992 and 2012, the value of classic and collectable cars rose by an average of between 18 per cent and 20 per cent a year. An MGB that would have cost £5,000 five years ago could now set you back more than £10,000.

The pattern is often repeated in other investment areas. Between 2005 and the end of June 2013, the price of collectible watches rose by 176 per cent while jewels returned 146 per cent.

In the art world, traditional Chinese artworks rose by 163 per cent between 2005 and mid-2013. Fine wine has also enjoyed a boom in the last 15 years and although the market saw blips in 2008 and 2011, it has begun to show signs of recovery in the last quarter.
Info from “The Telegraph”

According to the Knight Frank Wealth Report, classic cars were the top performing collectible investment in 2014, posting gains of 16 percent. That narrowly beat art, with 15 percent gains, and coins, with 13 percent gains. But cars left stamps, jewelry, wine, coloured diamonds and watches in the dust. Cars have also held the pole position over the longer term. They have posted the best 10-year performance—with gains of 487 percent—as well as the best over five years, with 140 percent.

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