Luxury as an Asset Class

Updated 10 October 2026

Beauty, passion and value are often hard to combine but in this instance it is as enjoyable as it is profitable. (First written for our friends of the Simple Platform and published on andsimple.com)

The need to diversify investments is one of the first things we learn when we study finance. I’m sure you can still hear the famous words of your parents, professors or mentors: “Never put all of your eggs in one basket.” As our world evolves and revolves over time, we see new asset classes being created. The latest example was cryptocurrencies, but there are also other types of assets that have come more and more into view over the past years and those are luxury goods.

As lifestyle managers, we deal daily with the purchasing wishes of our clients, and our experience has taught us that the highest category of luxury is recession-proof and doesn’t move with the market. However, there is a category of luxury that follows the market(s) simply because these items don’t get bought as investments or stores of value but more to display status by those who have recently come into some money.

To most people, buying luxury is not about how the item makes them feel, but rather how it makes others feel who see them wear it, use it or drive it.

There are a number of brands and products that have performed exceptionally well over the last decade. In mid-June 2022, when this piece was written, investments had corrected heavily over the previous six months, in shares and in cryptocurrencies alike, while a Hermès Birkin and many Patek Philippe models still traded well above their retail prices.

Then there was the Nautilus that Patek Philippe made with Tiffany & Co. in 2021, the last iteration of the reference 5711, its dial in Tiffany’s turquoise. Only 170 pieces were made, to mark 170 years of the alliance between the two houses. Shortly after its release, one of them was auctioned at Phillips in New York on 11 December 2021 for 6,503,500 US dollars, many times its retail price, with the proceeds going to The Nature Conservancy. Just by this example you can see how exciting it can be to invest in luxury products, if you have the right guidance and can identify the pieces that are worth your while.

That watch was a phenomenon, but it is worth highlighting, because such releases seem to occur regularly in the world of luxury products, and more and more often.

There are certain luxury brands and products that are absolutely timeless and therefore represent a store of value. Some are easier to store than others. For example you can build a watch collection that fits in the corner of a room or into a wall safe but you can also collect automobiles which requires considerable storage space and generates maintenance cost. That said, there are funds and investment companies that specialise in these types of assets and will provide turnkey solutions, especially in the automotive sector.

Store of value or hype?

In 2022, a pair of sneakers created by Louis Vuitton’s late designer Virgil Abloh with Nike was changing hands on the secondary market for many times its original price. It is a limited edition, like most items that increase in value, but it is a hype piece nonetheless. Some people will pay an outlandish amount for these sneakers and will even go out and wear them. Once you wear them, they lose the lion’s share of their value. But whether they are worn or not, this is the kind of item that will most likely not hold or increase its value over the years. A hype relies largely on the greater fool theory, which is never a good long-term strategy in any market.

In the world of luxury, you need to know the rarity and timelessness of the item in order to determine if it is a store of value. The item has to be relevant to the history of the brand or the overall market in which it exists, alternatively it has to be timeless with its design unchanged over many decades. Everything else is a hype product that will go up and then see its value dwindle over time as interest dies down.

Designs that do not date

Products that are timeless are, for example, the Audemars Piguet Royal Oak wristwatch, whose design was created in 1972 and has remained largely unchanged ever since, and the Patek Philippe Nautilus, created four years later by the same legendary designer, Gérald Genta. Patek Philippe marked the Nautilus’s 50th anniversary in 2026 with a series of anniversary pieces. Another example of timeless design is the Hermès Birkin, created in 1984, whose shape has remained unchanged while the classic colours are joined by new ones each season, so the piece stays relevant year after year and is still a classic.

All of these pieces are good examples of stores of value: in our experience, they have tended to sell above their retail price even after they were worn or used.

Why the full set matters

Investing in luxury assets requires expertise, not only in order to distinguish between hype pieces and stores of value but because small details can affect the value considerably. In the world of (vintage) watches, for example, it is essential to buy a watch as a complete set with the original box and all the paperwork that was once delivered by the brand or the store, including the handbook and the warranty card. Without those, in our experience you are looking at a much reduced market value, often more than 30 per cent below a full set. If you don’t get the box and original papers, you can never be sure whether the watch was ever stolen during its lifetime, and that risk is factored into the value.

Variants that change the price

Another important aspect is the slight differences between models or variants of luxury items. Products that exist in different colour variations are often not valued the same. Variations matter most of all in vintage automobiles. A manufacturer like Porsche or Ferrari will have built different series of the same car, like the Ferrari 250 of the 1950s and 1960s. The 250 GTO, built in very small numbers, was long the world’s most valuable car, while a 250 GT Lusso from the same era is worth a fraction of it.

The same nuances of production exist at Porsche with the famous 356, the company’s first production car, whose value varies considerably from one series to the next. If you don’t know what you’re looking for, you’ll easily miss important details.

Luxury is an appealing asset class because it combines value and passion and is thereby far from boring. With expert guidance through its pitfalls, you can own the finest things the world has to offer and enjoy them, knowing which of them hold their value and which do not.

First published on 16 November 2022.