Passion & Money: Your Best Investment 2014 Fits on Your Wrist

Passion & Money: Your Best Investment 2014 Fits on Your Wrist

Passion & Money: Your Best Investment 2014 Fits on Your Wrist

 

Coutts Index reveals passion investments have risen 77% since 2005, outperforming shares

The Coutts Index

Classic cars rise 257%
Classic watches up 176%
Billionaire property doubles in value
Passion investments returned 77% (local currency terms)* since 2005, outperforming shares, according to the first edition of The Coutts Index: Objects of Desire. Launched today, the new Coutts Index aims to provide the global benchmark for monitoring the performance of passion assets.

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The Index, developed in conjunction with Fathom Consulting, captures the price return in local currency (net of the holding costs) of 15 passion assets across two broad categories: trophy property and alternative investments. Alternative investments can be further broken down into fine art, collectibles and precious items.

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Of all the alternative investments Coutts examined for the Index, classic cars have returned the most since 2005, rising by 257%, outpacing all other investments by more than 80 percentage points over the seven and-a-half-year timeframe. Classic watches have also proved they can stand the test of time, rising by 176% from 2005 to 30 June 2013.

Jewels returned 146% in comparison, while the standout performer in the fine art space is the traditional Chinese works of arts sector, which rose by 163% between 2005 and 30 June 2013.

Over the past seven and a half years, the Coutts Index, based in US$ terms, has risen by 82% – over the same period, the MSCI All Country Equity Index has risen by 53%, based in US$ terms.

The Coutts Index incorporates a real estate component supplied by Savills World Research. Trophy property comprises ‘billionaire’ residential properties in the ten prime global city locations and ‘leisure’ properties in the world’s most desirable leisure destinations associated with these cities. Both measures lost value in the run-up to the global recession, but billionaire property values have risen strongly since, rising 100% from 2005 to 30 June 2013.

Mohammad Kamal Syed , Head of Strategic Solutions at Coutts, said: “The Coutts Index has been created to measure passion assets, or objects or desire, in terms of performance, cost of storage and currency. But while many alternatives have provided spectacular returns, there is more to investing in these assets than price appreciation. For many people, profit is furthest from their mind.”

He added that for many ultra-high-net-worth individuals, it is less about investing and more about purchasing – purchasing assets driven by their emotions.

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“The benefit is more than just profit. Owners can bond with like-minded people in an elite network, with assets offering escapism and a chance to re-enact history. Indeed, there is one thing that the Coutts Index, for all its robustness, can’t measure – and that is happiness. The idea of someone paying $50m for an uncomfortable old car, with windows that don’t work and a noisy engine, seems illogical. In many ways it is. But the happiness such a car can bring is immeasurable.”

Coutts commissioned articles and interviewed experts for its first edition of the Coutts Index. They included Stanley Gibbons, the world’s leading stamp dealer, Berry Bros. & Rudd, the wine merchant and auction houses Sotheby’s and Christie’s.

Quentin Willson, broadcaster and classic car specialist, looked under the bonnet of the classic car market. He wrote: “If you had bought a 1970s Ferrari Daytona for £50,000 in 2003, it would be worth £250,000 today. A 1960s Aston Martin DB5 bought for £60,000 a decade ago would now command £350,000.”

“The question is whether the classic car market has peaked. I’ve been wondering whether the bubble will burst ever since prices started to rise in 2009. But they have kept on rising and were up 27% in the first half of 2013.”

Nick Foulkes, author, historian and watch enthusiast, revealed why he has been fascinated with watches since he was a child. He wrote: “I can still remember writing an article in the 1980s, saying that the price of an old ‘Paul Newman’ Rolex Daytona was about to overtake the price of a new one. Now you will be lucky to find one for under £70,000.”

“But not all watches will burn a hole in your pocket. Rolex recently launched some particularly attractive Day-Date models with brightly coloured dials. These recalled the original ‘Stella’ dialled Rolexes and are now creeping up in value, but these Day-Date models can still be purchased for four figures. And I still think that vintage Cartier watches are hugely undervalued.”

About Coutts

Coutts is the wealth division of Royal Bank of Scotland Group. Coutts serves clients from over 40 offices across the world offering tailored wealth management, banking, trust and tax services. Coutts is headquartered at 440 Strand, London with offices in other key international financial centres in Zurich, Geneva, Hong Kong, Singapore and Dubai. The division includes Adam & Company providing private banking services from Edinburgh, and RBS International, based in the Channel Islands, which provides offshore banking.For further information please visit www.coutts.com

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Precision in Glashütte is timeless

Precision in Glashütte is timeless

Since the foundation of their eponymous company in 1854, in the town of Glashütte, the Lange family has always pursued precision and perfection, having developed their own grading system under which only the very best products were awarded the “1A” designation. The brand ceased to exist under Red Russia, having had its assets and properties expropriated in 1948; the Lange legacy was left to live in the shadows of the east.


Richard Lange Tourbillon “Pour le Mérite”

In 1994 Walter, the great-grandson of founder Ferdinand Lange, with help from the watch community in Switzerland, picked up the legacy and relaunched the brand and its ideals; the new company started under the name A.Lange & Söhne.


Richard Lange Tourbillon “Pour le Mérite”

Now with the 2011 launch of their fourth watch honoured with the “Pour le Mérite” nomination, Lange has produced a wristwatch which pushes the boundaries of precision – equipped with Lange’s signature fusee-and-chain transmission accompanied with a tourbillon and adding to the complication a patented stop-second mechanism. The stability and precision of the Richard Lange Tourbillon “Pour le Mérite” is impeccable, and the dial communicates a unique approach to that horological invention, producing a well-balanced trinity between the time differentials and giving a glimmer to the observer of the technical perfection hidden beneath the rhodium-plated solid silver dial. As you can see on the pictures, there is a cutaway at the subsidiary seconds’ sub-dial, which is located between 7 and 8 o’clock and overlaps the hours’ display standing between 4 and 5 o’clock. When the hour hand goes past 6 o’clock, there instantly appears a pivoting segment of the sub-dial with VIII, IX and X numerals printed on it. The segment stays in its place until the hour hand reaches the 12 o’clock position and then disappears again in a blink of the eye.

This “Made In Germany” manual-wind movement is on our 2011 Must-Have list.


Richard Lange Tourbillon “Pour le Mérite”


Richard Lange Tourbillon “Pour le Mérite”

Photos © A.Lange & Söhne