Investing in Cars, Art and Collectables

Over the years, and also quite recently, I have had clients that have had some very strange investments.

While working in a country town in New South Wales I knew a man that invested almost every spare dollar he had in Art, paintings mostly. As to how wealthy this person has become from these investments I do not know, as I haven’t lived there in some years. This country town I lived in was home to some world-renowned painters such as Pro Hart, Peter Brown (aka the Vegemite Painter), Jack Absalom and Eric Minchin, so the accessibility to well recognized artists was quite good

I have read that Vincent van Gogh made almost no money from his paintings, neither did Pablo Picasso. It seems ironic that the talent of these two painters yielded little return for them but now their paintings sell for tens of millions of dollars. Perhaps the man I once knew is yet to fully realize the full value of his purchases and may need to wait some time for them to appreciate to a more significant value. That is assuming he finds someone willing to pay what he values the pieces to be worth.

I had a client quite recently that told me that her mother had a vintage Victorian number plate (basically an early edition plate) and that her mother purchased it in the 1970's for $1000. Her mother sold it almost 20 years later for $20,000 to assist her son financially. My client, disappointed that her mother had to sell the item she treasured, bought her mother a different vintage Victorian number plate for $30,000 back in 1998. With the recent passing of her mother, my client had the number plate appraised and was informed that at auction it would fetch approximately $120,000. This is quite a difference, and is mostly due to the number on the plate itself. Personally I would seriously question buying a number plate for $1000, let alone buying one for $20,000 / $30,000. In this circumstance the investment paid off and now the item has significant value (both monetary and sentimental). Again this plate is only worth what someone is willing to pay for it. Its scarcity and apparent demand will dictate its current and future value.

Wine is becoming a common investment nowadays. I recently read an article explaining that in the United States the value of some selected premium wines have outpaced the Dow Jones Index. To be honest a lot of things have outpaced the Dow Jones as the last few years it hasn't performed well. In Australia premium labels such as Penfolds and Henschke have continued to produce wines of exceptional quality. It is easy to see the capital gain on these items as you just have to look at the cost of back vintages of the flagship or marquee wines from these makers to see how well they age. A few things will influence the appreciation of wine:

Quality of the Vintage - Some years are better than others due to the season, weather and grape quality.

Cellaring - Wines of this caliber require proper cellaring.

Limited Release - This is simple, the less made, the better the chance the value will increase (depending on demand and the abovementioned points)

Reputation of the Winery/Winemaker - Go with well recognized Wineries and Winemakers.

Finally if buying for investment, be careful not to drink your investment. If you do be sure to do it with the ones you love.

If you have heard of some strange investments please email your story to taoi@hotmail.com and your story could be featured in this article.