Nearly one in ten adults are termed ‘magpie’ investors. According to recent research1, these individuals invest in luxury items in the hope of seeing an increase in value and attractive returns.
The favoured items to purchase include watches, jewellery, collectibles, art, wine, whisky, classic cars and high-end accessories like clothes and handbags. Jewellery came top of the list, with almost half (46%) investing in it with the expectation of appreciation in value.
On average, these magpie investors have allocated over £40,000 each to luxury items. From 1,000 people surveyed, the trend looks set to continue as nearly half (47%) of these investors plan to increase their investment in luxury items over the next five years. Specifically, more than one in eight (13%) intend to dramatically increase their investment in such assets. Meanwhile, around a third (34%) expect their investment levels to remain steady, and 9% foresee a decrease.
The appeal of luxury investments lies in their potential for high returns and the enjoyment of owning prestigious items. However, it can be a higher-risk approach; magpie investors need to ensure they are considering the overall balance of their portfolio, the illiquid nature of luxury investments and the risks associated with investing in non-traditional assets.
Investors can access funds that invest in tangible assets as a more liquid way of gaining exposure to such markets.
We can help to ensure you have a well-rounded and resilient investment strategy.
1Investec, 2024
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.