The Best Luxury Investments for 2021

This last year has been challenging for countless businesses and individuals. The rich got exponentially richer and the middle class was left in a state of limbo. But even if you don’t have 10 figures in your bank account after a disastrous 2020, there are luxury investment opportunities ripe for 2021. 

That said, the COVID-19 pandemic has disrupted a number of markets, but we’re glad to report that there are still sectors that have incredible growth potential. We’ve put together a quick guide to the most lucrative investment forecasts for 2021 to escalate your portfolio and diversify your assets. 

Luxury Whisky & Wines

Of course, this is where we need to start, as this is our livelihood and area of expertise. 

Despite a global economic downturn, investment-grade whisky and wines have shown considerable gains over the last 12 months with no signs of slowing down. Historically, drinkable assets are resilient to downturns, and this catastrophic year was no exception. Both rare wines and whiskies have been the recipient of renewed interest and enthusiasm this year, leading to scarcity and increased prices (the best ingredients of a luxury investment).

For vintage champagnes, the demand is exceeding the supply this year which is a main driver for a solid investment. 

According to Knight Frank, there has been some stress in the market for bottles of rare whisky worth more than £5,000 in response to the economic climate. Despite that, though, September showed growth across the board. In the final quarter of 2020, investments in the wine and whisky industry are looking strong. 

As we noted in the beginning of the pandemic, luxury wines can swerve economic downturns for a myriad of reasons. The fine wine industry is nothing like an ordinary investment, because investment wines boast global brand recognition, critical appraisal and premium pricing. Further, price appreciation and drinking potential only reveals itself after years of maturing in the bottle.

If you’re interested in starting your wine investment portfolio, please contact one of our expert consultants heading into 2021.

Handbags

Image by By Herry Lawford

A Forbes report noted that designer handbags are now a better investment than art and classic cars (see below for more on those investments). According to Art Market Research, more than 3,500 designer handbags were sold at auction in 2019 for a total of £26.4 million. 

Of course, the Hermès crocodile handbag remains one of the most collectible bags in the world; the Hermès Kelly’s has risen 129% in value in the last 10 years. Likewise, classic Chanel flap bags have risen by 132%.  

This investment is considered a quick return, especially if the bag is limited release or more expensive than its designer peers. A crocodile Himalayan Birkin sold for £125,000 at auction this year, despite the lockdown and nowhere fancy to go. 

So, next time you’re thinking of gifting your significant other with a lavish accessory, you can think of it as a sturdy investment decision. 

Art

Those in the know claim that contemporary art is a safer investment than Bitcoin (the buzzword among investors now, to be sure). According to InvestorPlace, an established artist will forever generate demand. Posthumously, the supply is limited. The scarcity and demand make fine art a secure investment for 2021. 

Art investment is likened to real estate rather than stocks, because it’s not liquid. You have a safer bet with established artists whom you can already see value, monetarily and aesthetically. Though, the biggest returns and risks come from up-and-coming artists that haven’t yet solidified their reputation. 

Pre-COVID, the art market was bloated. Twenty-five artists accounted for half the market; during the pandemic, though, that bubble popped. Sellers panicked and began offloading their collections, widening the playing field for more amateur investors. So, if you have the money and the time, the art market is a good place to start diversifying. 

Classic Cars 

If you’re active in investment news and trends, you already know that classic cars are central to the conversation in 2021. 

Historically, classic cars boomed in the late 80s but crashed a few years later. Spectators weren’t sure if classic cars would ever generate the interest and investment value they boasted ever again. Alas, growing interest in Asian market caused prices to soar. Knight Frank’s Luxury Index shows that classic car values have increased by 469% in the last 10 years. Backing that up, independent investment research organisation Historic Automobile Group International (HAGI) states that quality classic cars have been one of the best performing investments in the last 10 years.

Other investment opportunities can be liable for capital gains tax (think stocks and shares), but not classic cars. What’s more, if a car was built before January 1973, it’s exempt from road tax. 

Oracle Finance reports that the UK classic car industry is considered “the most sophisticated in the world.” 

So, there you have it. Your investment Christmas list for 2021 – a cool classic car, a beautiful piece of contemporary art, an Hermès bag and a beautiful rare wine to celebrate your new investments.