The pandemic has seen an increase in the number of people shopping for what they might be worth in the future.
Why now and what are the risks? Eleanor Pringle investigates
When people think of investments, they tend to think of stocks and stocks.
They think the boarding pots and tables are flashing red and green.
They don’t think of an extraordinarily expensive handbag or a work of art.
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And yet, during the pandemic, people have shifted from consumers to investors and spend with the intention of generating money later, experts say.
Art boomed during the lockdown – the online Rise Art Marketplace saw customer order values increase 65% at the start of the pandemic from the previous year.
Meanwhile, in the luxury goods market after a surge at the start of the pandemic, spending has returned and is expected to rise.
Data users Statista say Gen Z and Millennials, especially in the Chinese market, will see the industry grow from $ 309.6 billion in 2021 to $ 382.6 billion by 2025.
“There has been a change from buyer to investor,” said Richard Ross, director of Norwich-based financial planner Chadwicks.
“People jump on trends like bags and sneakers because they see other people doing it and we behave like a herd and tend to follow what other people are doing.
“The problem is, when you join the market at its peak, it’s already too late – you have to look at what’s next. ”
There are also three issues to be wary of when shopping for items like designer watches, handbags and artwork, he added.
“The first is that the price will take into account the commission. If you buy an amazing bottle of wine from a dealer, a significant percentage of that price will be their commission, so once you buy it you can’t sell it.
“The second is that you are not buying in an open market. What works with the stock market is that the price reflects the opinion of everyone at that time: buyers and sellers.
“Auctions work the same way, but on a smaller sale – you still have that supply and demand heading for a price in front of you, so you know when you buy it that it’s a fair price.
“Now that might change over time, but you know it’s right when you buy it. You don’t know what when you walk into a store and buy something because the total value of that product is based on the seller’s estimate, ”he said.
He added: “The third thing to consider is liquidity. I know that if I sell my shares, I will have the money in a week. I don’t know that about a classic car or a piece of art because they can take months to sell.
“I would say when shopping like this you really have to do your research and accept that part of the value of this coin is not financial, but for your own personal enjoyment.
“At the end of the day, the money is not for doing more, but for allowing you to live the way you want to.”
It was taken over by gallery owner and Banksy expert, John Brandler.
The founder of Brandler Galleries in North Essex said: “Investing in art takes heart. You have to invest with your eyes – not with what you hear is good.
“I have clearly seen an increase in the number of people buying art as an ‘investment’ and they are looking for brands that they think tick that box.
“I really don’t like it – that’s not how I want to sell art and that’s not how I run my business. The people who made money with art are the ones who bought it decades ago when they had no money to spend.
“I know a couple from Bristol who spent their entire student loan on Banksy coins – now they’ve paid off their mortgage. But they risked it all when they were young because it was art that they really loved and wanted to have in their home.
And he added that the art world operates outside the normal rules of supply and demand.
He explained: “If an artist creates more pieces it can actually drive up the prices because it creates more frenzy – we see that with Banksy.
“There is also a demand phenomenon that only occurs after a certain price. I see it with people who are only interested in a piece if it is over a million.
“They feel like they can’t have a multi-million pound hotel with a room in the lobby worth £ 25, so they only get interested when it goes over a certain number. It creates this artificial price inflation that people think is genuine. ”
But for an auction house outside the “hype” market, real increases in value are recorded.
Tim Blyth is the managing director of Keys Fine Art Auctioneers, which said he has seen a surge in the number of people buying antiques as bullion coins in the foreclosure.
He explained: “This was initially due to buyers being at home and finding things to bid on online, but as everyone slowly returns to work, demand has remained high and the trends we are seeing are pointing. very strongly towards a strong investment-oriented market. . “
He echoed Mr Brandler in saying that art was also seeing huge increases in demand: “The growth of modern art shows no signs of slowing down, as recent local interest in art has shown. Banksy’s activities.
“There are some very underrated late 20th century and contemporary artists who just might take the plunge – although, as always, the tricky part is judging which ones.
“20th century designer furniture also continues its ascent, as do ‘modern’ collectibles such as toys and even the first and second generation of video games and personal computers – as the generation that grew up with it. they are interested in the collection of objects that they remember. their younger years.
He added: “Jewelry has traditionally been a good long-term investment, in part due to the intrinsic value of the metal which continues to rise due to increasing demand.
“Top quality will always retain its value over time, but there are some areas that we believe can still be undervalued; price trends for traditional brown furniture
are starting to recover and some of the more traditional paints represent good value for money in today’s market.
“As always, however, the advice remains – buy the things you like and you’ll appreciate.”