Should you treat luxury bags, jewellery and watches as investments? What you need to know
Luxury bags, fine watches and jewellery are increasingly seen as alternative assets – but can they really hold their value? In this fourth instalment of the CNA Women money series, experts look at the risks and realities of counting luxury goods as part of your long-term financial plan.
Luxury bags, watches and jewellery are often touted as investments, yet experts caution that most are speculative assets where rarity, condition and demand determine resale value. (Photo: iStock/Marcos Calvo)
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When it comes to investments, not everyone turns to stocks and bonds. Some women are looking at jewellery, watches and designer bags as alternative options.
With a Patek Philippe Grandmaster Chime timepiece auctioned off for 31 million Swiss francs (S$50.77 million) in 2019 and a Hermes Himalaya Niloticus Crocodile Diamond Birkin 30 sold for over US$450,000 (S$574,861) in 2022, it is easy to see the appeal.
Florence Low, founder of LuxLexicon, a Singapore luxury resale and consignment platform, is a strong advocate of investing in luxury goods as an alternative asset class – she allocates a portion of her investment portfolio to buying designer handbags, watches and jewellery.
Low said luxury goods can be resilient assets in the resale market, where strong demand, limited supply and brand reputation can push up prices.
Plus, she benefits from using these goods during the holding period as well, Low added.
However, this investment strategy comes with some caveats.
Karen Tang, a certified financial planner and a finance coach said that while luxury goods can be seen as alternative investments, they should only be viewed as speculative assets with limited value, and not as true investments like equities or income-producing property.
Tang said their limited investment value stems from prices being driven by trends and brand demand, high transaction costs, dealer- and platform-controlled resale markets, and illiquidity – meaning they are hard to sell quickly at a fair price.
“Hence, while investment value exists, it is the exception, not the rule,” she added.
LUXURY GOODS AS ALTERNATIVE INVESTMENTS
The idea of luxury goods becoming investments came about because of scarcity marketing, auction culture and low bank interest rates, Tang told CNA Women.
Brands release seasonal and limited-edition bags, jewellery and watches in small quantities, creating scarcity and long waiting lists. If demand remains strong, this can sometimes push up resale prices.
Auction houses such as Sotheby’s and Christie’s have helped elevate handbags, watches and art from consumer goods to perceived alternative assets. Through curated storytelling and by assigning high valuations to authenticated pieces, they create a sense of rarity that pushes final bids well above retail prices.
It has led to record-breaking sales in some instances: The original 1985 Hermes Birkin bag prototype once owned by the late actress and singer Jane Birkin, was sold for 8.58 million euros (S$12.73 million) in 2025 by Sotheby’s, reinforcing their status as wealth assets.
Tang added that with low bank interest rates being the norm, people are now searching for alternative ways to preserve or grow their wealth.
She added that social media has amplified the idea that luxury goods increase in value over time, leading more people to view luxury purchases as a form of investing.
However, not every luxury item can be considered an investment piece.
Tang said women should treat luxury goods as high-risk assets because of their volatility – demand may not last, values may not appreciate, and resale prices also depend on how well the items are maintained.
And if you’ve acquired debt to buy the item, say through instalment plans or borrowing money, then “it’s not an investment, it is a liability”, she added.
CAN YOU STILL USE THESE ALTERNATIVE INVESTMENTS?
Yes and no.
Usage reduces resale value. “Unlike stocks, luxury items are wear-and-tear assets. The more you use them, the lower the resale price unless they are extremely rare collector pieces,” said Tang.
Low agreed, adding that “items like handbags or watches tend to show wear more clearly and regular use will likely reduce their resale value”.
Thus, Tang advised viewing your luxury goods as “lifestyle assets with possible residual value – not financial assets designed for growth”.
However, there are some exceptions. Coloured diamonds or precious gemstones don’t easily show signs of wear, which allow you to enjoy using your jewellery as you hold onto them, said Low.
DOES ART MAKE A GOOD ALTERNATIVE INVESTMENT?
Milon Goh, co-founder of Art Again, a Singapore-based secondary marketplace for artworks, said art became formalised as an asset class after economists in the 1970s began analysing art price data to assess whether it could perform like stocks or bonds.
This led to the creation of art price indices, such as the Mei Moses Art Index, which tracks sectors including Impressionist, Post-War and Contemporary art. These benchmarks allow investors to measure performance and volatility.
Such data has helped position art as an asset class with measurable risk and return, enabling collectors to approach it more like a financial portfolio.
Not convinced? Global art sales were at an all-time high in 2022 at US$67.8 billion (S$86.72 billion) according to The Art Market 2023 report, an annual study that analyses the global art market.
An art collection can potentially serve as both a tangible asset and a statement of identity when displayed.
To protect these assets, Chua Chingyi, co-founder of Art Again, advised owners to avoid displaying their art in direct sunlight or above heat sources. “UV exposure can cause irreversible pigment fading,” she said.
Gently dust them with a soft, dry cloth or soft, natural-hair brush regularly and “conduct quarterly condition checks for discoloration, mould, loose paint or frame damage”, Chua added.
And similar to luxury goods, “retain original packaging — crates, boxes, and wrapping materials, which can add value and facilitate future transport” if you plan to resell it in the future, said Chua.
HOW TO PROTECT THE LONG-TERM VALUE OF ALTERNATIVE INVESTMENTS
1. CHOOSING THE RIGHT MATERIALS
“Condition is everything as scratches and stains can reduce its value,” said Tang.
For instance, opt for durable materials like hardstones, precious gems, gold, platinum or scratch-resistant watch cases for your timepieces, said Low. “These show wear far less than soft leathers, delicate fabrics or high polish finishes, which can help preserve value over time.”
2. SELECTIVE, NOT DAILY USE
Save your investment items for a special occasion rather than for everyday use. “Limited, mindful use reduces visible wear while still allowing you to enjoy ownership – resale buyers strongly favour lightly used items,” Low added.
3. KEEP COMPREHENSIVE DOCUMENTATION
This includes original boxes, dust bags, certificates, receipts and service papers as these enhance resale value. “Complete sets signal authenticity, proper care and strong provenance, which buyers and auction houses prize,” said Low.
4. PROPER STORAGE AND CARE
Climate and light control can prevent unnecessary deterioration. Consider keeping your luxury bags in a cupboard fitted with heated dehumidifier rods. This protects the leather by reducing relative humidity and prevents moisture build-up that can cause mould, mildew and musty odours.
5. REGULAR MAINTENANCE
To ensure that items remain in good condition, clean your bags and watches with a soft microfibre cloth after use to remove dust, sweat and natural oils from your skin.
Low also advised sending your watches for regular brand-authorised servicing to protect their long-term value. Do this every three to seven years depending on how frequently you use them.
6. AVOID CUSTOMISATIONS AND BE CAUTIOUS ABOUT REPAIRS
“Original condition is key in the secondary market, and irreversible changes can reduce the demand and price”, said Low. So avoid engraving, resizing beyond reversible limits, repainting a leather item or even using third-party repair services.
Ultimately, your luxury items should sit under “passion purchases with resale potential” and never under wealth strategy, said Tang.
Buy luxury items because you love them, and not because of any perceived investment potential. Because if appreciation doesn’t happen, you must still be happy with what you’ve bought.
Treat the resale of your bags, watches, jewellery as recovery rather than profit, and if you can break even after years of enjoyment, consider that a win, added Tang.
So, go ahead and enjoy your purchases, but don’t mentally count them as part of your retirement plan.
The information provided in this article is for general informational purposes only and should not be considered financial or investment advice. Readers should conduct their own research and consult with a licensed financial advisor.
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