RAPAPORT... Jewelry is the top ''investment of passion'' for the world's wealthy this year, according to Knight Frank Research's ''The Wealth Report 2014.'' Art ranks second followed by watches, wine, diamonds, classic cars, photography, furniture, musical instruments, coins, stamps and ceramics. However, there are regional nuances to the rankings.
Jewelry is the most collected investment of passion asset for the wealthy in Africa, Asia, Latin America, the Middle East and Russia, whereas jewelry ranks third in the Australasia region, behind art and classic cars and it ranks fourth in Europe behind wine, art and watches. In North America, jewelry as an investment of passion ranks third behind art and watches.
Watches as an investment of passion fell into either second or third place for all regions except Australasia where it ranked sixth.
Diamonds as an investment of passion ranked fifth globally, placing third in Asia, taking fourth place for the wealthy investors in Africa, the Middle East and Russia, fifth place in Australasia and Latin America and sixth place for Europe and North America.
The popularity of each investment class varies greatly by region. Overall, art is the most popular asset followed by wine, watches, cars, diamonds, jewelry and photography. However, the popularity of furniture, musical instruments, ceramics, coins and stamps is decreasing.
Knight Frank Research found that 36 percent of wealthy investors globally expect to increase their spending on luxury goods this year, with the great increase anticipated from the wealthy in Africa. Fifty-seven percent of wealthy will spend the same as they had in 2013. Only 7 percent anticipate spending less on luxury with the greatest decline coming out of Latin America.Additionally, 61 percent of the wealthy claimed to seek investment of passion simply for ''personal pleasure,'' while 16 percent invested for capital purposes, 15 percent bought as a status symbol, 6 percent sought a safe haven and only 1 percent purchased for fashion.
The Knight Frank Luxury Investment Index (KFLII), which measured performance of collectable luxury asset classes noted that jewelry improved 2 percent year on year in 2013. However, the investment performance for the past five years has increased 46 percent and for the past decade it has increased 156 percent, according to the index.
Watches gained 4 percent in 2013, supporting a five year increase of 32 percent and a 10 year jump of 82 percent.
The Wealth Report compiled surveyed data that represented 23,000 ultra high-net-worth individuals (UHNWI) with an average net worth of $68 million. Knight Frank Research defined UHNWI as someone with $30 million or more in net assets, excluding their principle residence.