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Shopping for collectible includes fine art, wines, coins, furniture, ceramics, stamps and cryptocurrency. These are some of the interesting collectibles requiring a different type of price indexing for interpreting the returns on investment. Historically, luxury collectibles such as fine art was dominated by rich class, and a substantial amount of collectors explored worldwide to buy items, mostly, as a hobby, for fun or as a pastime. Over years people have earned and even lost collectibles but super rich absorb the losses in such investments. In addition, high priced collectibles require proper storage and insurance.
Auctions fetching record price from rare collectibles
In 2018, most high priced auctions witness a number of Chinese luxury buyers. A pink diamond was sold for US$71 million during an auction by a Hong Kong Jeweller, and some rare collectibles such as ceramics and even furniture paid off well in the auction, where a 16th to 17th century furniture was sold by Bonhams at £5.3 million to an Asian buyer.
Today, art or paintings, can be bought for selling to museums, for an art business, as a stock for art business, or as an investment. The investment in art requires proper advisory, valuation, insurance, collection management, portfolio management and risk management. Sale to museums can provide financial benefits and even tax benefits.
Many wealthy art enthusiasts are investing in fine arts, where the prices hit a new high after every auction. Art sale in Hong Kong is booming and expanding due to increase in total revenue from art auctions. An art auction house, Tokyo Chuo Auction, has applied for listing at the Hong Kong stock market to gain funds for expansion into new markets. Other reports state about 35 per cent of the total spending in Christie’s global auctions is made by Asian Super Richs.
Auctions in fine wine are also getting higher prices from Asian buyers from Taiwan and China, who are spending millions of dollars for buying expensive fine wines at Hong Kong Auctions. Fine wine is scarcity driver market and back to back poor harvests can cause a rise in rates significantly.
Classic cars have always been in limelight and again, it is one of the best performing asset class as per Knight Frank Wealth Report 2018. Classic car auctions show escalating prices where 1956 Aston Martin DBR1, was auctioned for US US$22.5 million. A Ferrari 250 GTO – 1962 model was bought at $38 million in 2014, at Bonham’s auction - public sale, which was sold privately for more than $50 million. These are exceptional cars, but require approximately $250,000 annual premium for insurance.
The 2017 reports by Barclays and the art market research finds diamonds, fine art, fine wine and classic cars are driven by fixed supply and growing demand in the super rich groups- the HNWIs, even as, the HNWIs increased from 11 million in 2011 to 16.5 million in 2016, and their wealth continues to grow. It is expected that the increase in HNWIs wealth will be more than $100 trillion by 2025, while, only 10 percent of the wealth is invested in collectibles.
To find out more about, collectible auctions and sale, check 99 Alternatives (http://www.99alternatives.com).
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