The authors examine whether collectibles such as art, stamps, and violins deserve a place in an investment portfolio. Using more than a century of historical data, this paper finds these assets outperformed bonds and gold over time, while highlighting meaningful costs, illiquidity, and hidden investment risks.
The Investment Performance of Art and Other Collectibles
Elroy Dimson, Christophe Spaenjers
Research
19 Pages
Key Takeaways
Long Term Returns: Art, stamps, and violins generated annual nominal returns of 6.4%, 6.9%, and 6.5%, with real returns ranging from 2.4% to 2.8% between 1900 and 2012.
Equities Still Lead: Equities delivered a 5.2% average annual real return versus 2.4%–2.8% for collectibles, although collectibles outperformed bonds (1.5%), bills (0.9%), and gold (1.1%).
Hidden Investment Costs: A 25% transaction cost on stamp sales historically required holding periods of at least 4 years to recover through appreciation, before considering storage and insurance expenses.
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