How to spend it
(UK Sunday Times piece)
Summarised by: Alexa Williamson
While reading The Sunday Times in December, I found their article “The best places to invest a bonus” amusing and interesting (as one who has a general interest in finance) and wanted to share it .
The article states:
* Bonuses will be 16% lower this year at £7.4 billion.
* Last year most bonuses were invested in property. Ie £5.5 billion of 2006′s £8.8billion UK bonus round went into bricks and mortar.
* Last year the big area for bankers to invest their bonuses in was property (ie £5.5billion of the £8.8billion bonus pool was spent here). However, with houses prices falling, the ST recommends the following areas to invest now:
* Fine wine prices are up 42% over the past year, although they’ve slipped 3% in the past three months. And, expert Simon Staples from wine merchant Berry Brothers & Rudd says that the prices are likely to be unaffected by an economic downturn.
* Staples rates the 2005, 2003, 2000 and 1996 bordeaux wines as worth investing in. Eg he believes a case of 2005 Lafite Rothschild, now priced at £7,200 a case could increase to about £20,000 in the next five years.
* He also believes 2008 could be a good year to buy champagne as the 2000 vintages of Dom Perignon, Krug and Salon are released.
* Fine wines are not usually liable for capital gains tax (CGT).
* More recommended buys: 2005 Chateaux Margaux, £7,200 a case, 2001 Chateaux d’Yquem, £4,000 a case.
* Staples rates the 2005, 2003, 2000 and 1996 bordeaux wines as worth investing in. Eg he believes a case of 2005 Lafite Rothschild, now priced at £7,200 a case could increase to about £20,000 in the next five years.
* He also believes 2008 could be a good year to buy champagne as the 2000 vintages of Dom Perignon, Krug and Salon are released.
* Fine wines are not usually liable for capital gains tax (CGT).
* More recommended buys: 2005 Chateaux Margaux, £7,200 a case, 2001 Chateaux d’Yquem, £4,000 a case.
* Recommended to buy now, for long-term investment, due to current economic conditions.
* Recommended investments: a Victorian dining table for £3-5k, a Georgian table for £10-15k.
* Recommended investments: a Victorian dining table for £3-5k, a Georgian table for £10-15k.
* Value of fine art is up 55%.
* Eg an Andy Warhol painting of Elizabeth Taylor recently sold for $21million and was bought six years ago for $3.6million.
* The art market behaviour follows the stock market behaviour and mirrors its behaviour about 12-18 months later.
* Recommended investments: modern British artists such as Patrick Caulfield or John Hoyland.
* Eg an Andy Warhol painting of Elizabeth Taylor recently sold for $21million and was bought six years ago for $3.6million.
* The art market behaviour follows the stock market behaviour and mirrors its behaviour about 12-18 months later.
* Recommended investments: modern British artists such as Patrick Caulfield or John Hoyland.
* Vintage jewellery and precious stones are seeing increase in price. Eg a vintage art deco Cartier diamond choker expected to fetch £50-70k at auction reached £334k.
* Shooting estates and farmland are tipped as ‘the next big thing’ for property investment.
* Farmland has surged 75% in value over the last three years and is estimated to surge 10-15% over the next year.
* Woodland prices have surged 50% this year.
* Farmland has surged 75% in value over the last three years and is estimated to surge 10-15% over the next year.
* Woodland prices have surged 50% this year.
* Expected to surge this year as many top funds have made “millions from the credit crunch”. Eg The Credit Suisse/Tremont Hedge fund index has risen 12% to the end of November, compared with 1.8% for the FTSE All-Share.
* Recommended investment: Thames River Hedge+, which invests in a portfolio of other hedge funds, has returned 33% this year.
* Recommended investment: Thames River Hedge+, which invests in a portfolio of other hedge funds, has returned 33% this year.
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