MAXI CAPITALIST

Library guide · Capital Allocation

Investing in Art and Collectibles (Passion Assets)

How the wealthy treat art, watches, wine and cars as both passion and investment, and the realities behind the returns.

Last updated 9 August 2026 · 2 min read

Passion assets are collectibles the wealthy own for enjoyment as much as investment: art, classic cars, fine wine, watches and jewellery. They can hold or grow in value and diversify a portfolio, but they produce no income, cost money to hold and insure, are illiquid and hard to value, so they are best treated as passion first, investment second.

For the wealthy, some of the most emotionally charged holdings are not stocks or funds but objects: a painting, a vineyard's finest vintage, a rare car, a watch. These "passion assets" occupy a distinctive place, part investment, part pleasure, and the honest framing of them matters.

What they are

Passion assets, sometimes called investments of passion, are collectibles owned for enjoyment as much as for value: fine art, classic and collectible cars, fine wine and spirits, watches, jewellery and gemstones, rare books and memorabilia. They are a recognised, if unusual, part of how the wealthy hold value, and the global art market alone turned over around 57 billion dollars in 2024 (Art Basel and UBS Art Market Report 2025).

The genuine appeal

Beyond the pleasure of ownership, passion assets offer real portfolio qualities:

  • Diversification: their value often moves independently of financial markets.
  • Store of value and inflation hedge: tangible, scarce objects can hold worth over long periods, similar in spirit to gold.
  • Long-term appreciation: the best examples, blue-chip art, rare classic cars, trophy watches, have produced strong returns over decades.
  • Portability and privacy: significant value in a compact, movable form.

The realities behind the returns

The romance obscures hard practicalities that make passion assets a difficult pure investment:

  • No income: unlike property or shares, they pay nothing while you hold them.
  • Costs of holding: insurance, secure and climate-controlled storage, maintenance and restoration.
  • High transaction costs: auction houses can take 20 to 25 percent combined, a large hurdle to clear before any profit.
  • Illiquidity: selling can take months, and the price is never certain until it sells.
  • Valuation difficulty and taste risk: worth is subjective and fashions shift; today's coveted artist can fall from favour.
  • Fraud: fakes and forgeries are a persistent danger, demanding expertise and provenance.

The sensible approach

The rule seasoned collectors follow is simple: buy what you love. Treated as passion first and investment second, a collection guarantees enjoyment whatever the financial outcome, and any appreciation is a bonus. Treated as a pure investment by someone without genuine expertise, it is one of the easier ways for the wealthy to lose money quietly. Sized modestly and bought knowledgeably, passion assets are a legitimate, characterful part of a diversified fortune. See How Do Family Offices Invest?

Frequently asked questions

Is art a good investment?
It can be, but with caveats. Blue-chip art has produced strong long-term returns and diversifies a portfolio, since its value moves independently of markets. But art generates no income, carries high costs (insurance, storage, transaction fees of 20 to 25 percent at auction), is illiquid, and is genuinely hard to value. It rewards expertise and is best bought by those who also love it.
What counts as a passion asset?
Passion assets, sometimes called investments of passion, are collectibles owned for enjoyment and potential value: fine art, classic and collectible cars, fine wine and spirits, watches, jewellery and gemstones, rare books, and memorabilia. The wealthy hold them for the pleasure of ownership, status, diversification and, sometimes, appreciation.
What are the downsides of investing in collectibles?
No income, real holding costs (insurance, secure storage, maintenance), high transaction costs, illiquidity (selling can take months and the price is uncertain), difficulty valuing them objectively, and exposure to fakes and shifting taste. This is why sensible collectors buy what they love, so the enjoyment is guaranteed even if the financial return is not.

This guide is educational and general in nature. It does not constitute investment, legal, tax or financial advice.