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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.''
Knight Frank Research found that globally, 36 percent of wealthy investors expect to spend more on luxury goods this year, with the largest increase anticipated from the wealthy in Africa. Fifty-seven percent of wealthy will spend the same amount 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 the 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. Art ranked second in Knight Frank's investment of passion category, followed by watches, wine, diamonds, classic cars, photography, furniture, musical instruments, coins, stamps and ceramics, with the rankings reflecting regional nuances. 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 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 Asia in third place, wealthy investors in Africa, the Middle East and Russia in fourth place, Australasia and Latin America in fifth place and Europe and North America in sixth place. 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. 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.
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