Are luxury items still worth investing in? Annual revenues from wine, cars and handbags are declining as collectors feel the pressure – but you CAN still make a profit on art (as long as the artist is a woman)

They are usually referred to as “investments of passion,” allowing collectors to monetize their interests.

But is the era of investing in luxury assets coming to an end? Cash returns on handbags, wine and cars over 12 months are starting to slow down – while rare whiskey bottles and champagne see their value plummet.

It has led experts to recommend that investors focus on goods that bring them ‘joy’, as appreciation in value is no longer guaranteed.

Despite this, artworks are still seeing healthy returns – with women’s creations experiencing the biggest increase in value over the past decade.

The findings, from the Knight Frank Luxury Investment Index (KFLII), reveal the extent to which unbridled inflation and higher interest rates wipe out investments.

The index tracked the value of the ten most popular collectibles — including jewelry, art and furniture — and found that their value had increased an average of 7 percent in the year to the end of July.

It marked the recurring study’s weakest annual performance since the second quarter of 2021 – when the US was in lockdown.

The trend has been attributed to a broader economic turmoil that is discouraging potential investors from parting with their money.

But art investments have remained relatively stable, with pieces increasing in value by 30 percent in 12 months.

Researchers noted that this symbolizes “the post-pandemic recovery period more than a market for robust health.”

But pieces made specifically by women have seen their value increase by 163 percent over the past decade.

Women artists saw most of this growth between 2016 and 2019 — a period that coincided with powerful social change movements such as “#metoo,” the report said.

All in all, asset investments continued to yield huge returns over ten-year periods. For example, the value of luxury works of art has skyrocketed by 109 percent over the past decade, while rare whiskey bottles have seen their value rise by 322 percent.

But the slowdown in annual investment returns shows tentative signs of a market cooling.

For example, the average investment-grade bottle of Champagne was down 1% over the past year, while a bottle of Burgundy was down 9%.

Similarly, rare whiskey bottles were down four percent and the value of handbags was up just one percent.

Commenting on the report, Wine Owners’ Nick Martin said sales stagnated as prestige prices were “putting the test” on consumers.

He added: “When interest rates have risen sharply to about six per cent, new releases, especially new releases (of wine), should be offered at a greater discount to convince consumers to spend on wine instead of cash keep money.’

Similarly, Liam Bailey, Global Head of Research at Knight Frank, said: “Economic uncertainty and higher interest rates are casting a long shadow.

“Experts in several asset classes named in the update say growth in their market is slowing or the declines have yet to continue.”

He added that focusing on the “pleasure” of owning a collectible “may be more important now that appreciation in value is far from guarantees.”

Beth Silverberg is pictured wearing a white vintage Hermès Kelly bag that she bought for $600 but has a retail value of $15,000. She is also holding a rare bright pink Chanel handbag that was purchased for $6,000

Price says Chanel, Hermès and Louis Vuitton purses are the safest investments

The report defines a luxury item as a commodity that is bought and sold on accessible trading platforms, which can increase their value over the long term.

It adds: ‘Second, and crucially, collecting the asset class in question should be enjoyable regardless of any changes in value. If there’s no passion involved, if the pleasure of owning doesn’t outweigh any drop in value, then it’s just another investment.’

It comes after Dailymail.com revealed that a growing number of ‘handbag investors’ emerged claiming to be making more money from their wallets than from the stock market.

Credit Suisse analysts found that the average value of designer wallets had increased by 92 percent over the past decade.

Former professional poker player Beth Silverburg claims to have made $100,000 buying and selling purses from brands such as Chanel, Hermès and Louis Vuitton.

“My very first bag was a Louis Vuitton 30 Speedy that I bought for $150 from the tips I earned as a waitress,” the 55-year-old from Pennsylvania told Dailymail.com.

“I flipped mine years ago for about $600, but they’re worth $1,500 now.

“I’ve always invested in stocks and shares, but my bags have left everything I’ve made the traditional way far behind.”

Likewise, influencer Steffie Price keeps a close eye on the cost of designer bags and regularly posts videos explaining the investment value of purses.

The 29-year-old New Yorker knows all too well how useful these investments can be after she had to sell four of her purses during the pandemic when her income dried up overnight.

She earned $5,000 each on two of her classic Chanel flap bags — which she purchased for $2,000 and $3,000, respectively.

In addition, she also sold a small Dior bag for $800 and a Louis Vuitton for $2,000. She had bought the last one for $1,500.

Price told Dailymail.com: ‘When the lockdown happened, a lot of brands stopped spending money on marketing, so suddenly I was left with no income.

“It’s nice to know that if I’m ever desperate for money, I’m down to about $30,000 worth of bags.”