Practical analysis for investment professionals
12 May 2014

Should You Invest in Emotional Assets? (Podcast)

Emotional assets, sometimes called “investments of passion,” include such luxury goods and collectibles as art, stamps, wine, and musical instruments. This unique asset class drew the attention of Christophe Spaenjers and his co-author, Elroy Dimson, whose article “Investing in Emotional Assets” was published in the March/April 2014 issue of the Financial Analysts Journal.

FAJ Editor Rodney N. Sullivan, CFA, spoke with Spaenjers about his research.



“We’ve seen an increased interest in these alternative asset classes — specifically in emotional assets — in recent years,” Spaenjers says. “One of the main reasons is that there’s a growing population of high-net-worth individuals, especially in emerging markets. And I think there’s also the realization that art and other collectibles form an important part of many investors’ net worth.”

Spaenjers and Dimson explored the long-term investment performance of collectibles and found that emotional assets outperformed government bonds, Treasury bills, and gold over the long run. But the costs of trading in these markets are high. Investors face many risks that are peculiar to investing in emotional assets, such as the highly illiquid nature of the assets and the difficulty in estimating their value.

“This does not mean that paying a lot of money for a painting is irrational,” Spaenjers says. “Our research only talks about financial returns. Our research cannot shed light on the nonfinancial, or emotional, returns that collectibles are providing.”

To hear more about the practical issues surrounding investing in collectibles, listen to the interview (above) or download the MP3.

CFA Institute members can access the full article on the CFA Publications website.


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: EdStock

About the Author(s)
Abby Farson Pratt

Abby Farson Pratt was an assistant editor at CFA Institute. Previously, she worked at the Denver Post and the University of North Carolina Press. Pratt earned the Claritas™ Investment Certificate and holds a BA in journalism and English from the University of North Carolina at Chapel Hill.

3 thoughts on “Should You Invest in Emotional Assets? (Podcast)”

  1. Polaris says:

    interesting opinion

  2. LARRY BRODY says:

    Recently, in Los Angeles, Jean Brunel spoke about the use of money in wealth to invest in this type of asset, as some investors can bear the risk, and find enjoyment and fulfillment in this type of investment. A collection can then be enjoyed, named, [ The John Smith Art Collection, for example ] and eventually have the estate donate the collection to a favorite Institution or passed on in the family, which I believe he characterized as “DYNASTIC INVESTMENT”
    I hope I got this correctly. His podcast of a CFAI presentation is available on the CFAI website

  3. emotional assets is an oxymoron. focus on fundamentals when investing. indulge in emotional things.

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