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Best investment for collectibles? Cars

Classic cars were the best-performing collectible investment in 2015, easily racing past art, wine, diamonds and other big-ticket assets.

According to the Wealth Report from Knight Frank and Douglas Elliman, the value of classic cars rose 17 percent in 2015. Coins came in second place with a 13 percent gain, followed by wine at 5 percent. Fine art came in a distant fifth, suggesting that despite highly visible purchases of hyper-priced masterpieces, the broader art market is growing at a more modest pace.

One of only 32 produced, this 1964 Ferrari 250 LM sold for $17.6 million at the Concours d'Elegance auction in Pebble Beach last August.
Source: RM Sotheby's

The worst-performing collectible category was furniture, as the newly wealthy opt for cleaner, more modern homes and lose their taste for gilded armoires. Chinese ceramics were flat, as were colored diamonds.

Granted, indexes used for tracking collectible markets are deeply flawed — and hide vast differences within each segment. For instance, while early Ferraris continue to soar in price, values for certain later-year Porsche and Mercedes-Benz models have fallen recently after big runups in 2013 and 2014.

Overall, the 10 collectibles markets measured by the Wealth Report showed a gain of 7 percent in 2015.

Looking at the five-year performance record, cars also top the list, with a 162 percent gain, followed by coins with a 92 percent gain and jewelry with 65 percent. Art racked up gains of only 28 percent over the past five years — far lower than the 50 percent gain in the over the same time period.

Ferrari, Lamborghini or McLaren?

Experts say growth is likely to slow even further across all collectibles groups with slowing growth in China and other emerging markets, along with volatile stock markets and rapid currency swings.

"We've already seen a slowdown," said McKeel Hagerty, CEO of Hagerty Insurance, the classic car insurance company. "But it's more of a rationalization of the market rather than a crash or correction."

Source: Knight Frank, Douglas Elliman Wealth Report