Savour International

There’s a growing trend toward investments in tangible assets such as classic cars, works by prominent artists, as well as real estate, stocks, gold, and antique watches. Trusted values – whether it be a Picasso or a Porsche – are particularly sought after, in view of rising inflation.

 

Have you ever heard of the DOX (not to be confused with the DAX) – the German Oldtimer Index, which is Germany’s Blue Book of classic cars.

Germany’s automobile industry association Verband der Automobilindustrie (VDA) has been issuing the DOX since 1999 based on appraisals of 88 different types of classic cars of various provenances. The values displayed in this index have long since exceeded those of the German stock barometer.

 

This comparison is far from invidious. For classic cars, apart from their popularity among collectors and car buffs, can also prove to be a solid financial investment – providing, of course, you buy the right car. The DOX increased an average of 5.7 percent annually between 1999 and 2009 – a rate far exceeding that obtainable with investments in DAX stocks.

Other vintage-car indices also show that old cars are a sound investment – one example being the Hagerty's Cars That Matter "Blue Chip" Index (HCTM), which is based on the values of the 25 most sought after post-war models, including the renowned BMW 507, the 1953 Chevrolet Corvette, and the 1958 Ferrari 250 GT California Spider.

According to Bloomberg News, the HCTM rose 67 percent between September 2006 and December 2010. By comparison, Standard & Poor's 500 index fell nearly 6 percent during this period.

Was the car ever owned by a famous person?

This trend has caught the attention of a number of investors. All of today’s wealth mangers report a great interest in the whole gamut of tangible assets, including real estate, stocks, and gold, as well as paintings, wine, antique watches, and cars – classic cars in particular.

And this appears to be a propitious moment to invest in these items, since classic-car values have fallen off of late. According to Germany’s automobile industry association (VDA), the DOX registered its first-ever decline (1.9 percent) during the first half of 2010.

 

Bloomberg News also reports that the classic-car market is currently in something of a slump after a decade of steady growth. One sign of this trend is the Historic Automobile Group International Top 50 Index, which, while it increased by 6.6 pecent in 2010, had registered an average long-term rise of 12 percent prior to this.

But if you want a good return on an investment in a vintage car, you need to look at more than just prices. For example, according to the specialists at Germany’s Fürst Fugger Privatbank, you need to find out how many specimens of the model you’re interested in are still around; because the fewer there are, the more in demand the model will be. The bank’s experts also point out that the condition of the car’s engine, chassis, body, and interior are key parameters, as is the car’s “biography”. For example, was it ever owned by a famous person, and if so are there any documents, photos or the like proving this?

 

1 | Although GM is still making the Corvette, current models can’t touch the elegance of the 1960s Stingray, of which (according to Fürst Fugger Bank) around 50,000
remain in existence. Value: around 50,000 euros.
2 | The convertible version of the Porsche 356 is particularly coveted by classic-car collectors. The model was replaced by the 911 series in the mid-1960s. According to Fürst Fugger Bank, a Porsche 356 C 1600 convertible is currently worth up to 86,000 euros.
3 | Many feel that the Mercedes-Benz 300 SL Gullwing is the most beautiful car ever made. According to Fürst Fugger Privatbank, a model in mint condition will cost you around 520,000 euros, and the price is rising.

To determine such matters, you need an expert; and experts in this field know that only genuine classic automobiles make for sound investments. These cars include those listed on the HCTM, as well as the Jaguar E-type, Porsche 356 (particularly the convertible models), and Mercedes-Benz 300 SL Gullwing – which is considered to be the most beautiful car ever made. Over the years, all of these classic cars have increased in value, and in some cases the increases have been substantial.

Prices of antique watches up by as much as 300 percent

Investors looking for sound investments have turned their attention not only to classic cars, but also to the art market, as well as auction houses for pricey antique watches. Unlike the classic-car market, there has been (according to industry experts) a veritable stampede of purchasers for both art and high-end watches, with particularly large sums being invested by Asians.

“The market has experienced quite an upturn, particularly over the past year,” notes Christina Schroeter-Herrel, an art expert in the Private Wealth Management department of Deutsche Bank. “Both revenues and prices have risen considerably. ”This recent increase in art sales is reflected by the fact that Christie’s record revenues were some 3.84 billion euros worldwide in 2010, up 53 percent over 2009 and the highest amount ever in the company’s 245-year history. And that wasn’t the only record Christie’s broke last year. Picassos “Nude, Green Leaves, and Bust” went for 70.3 billion GBP in May 2010, a world record for a painting.