Investing in Emotional Assets

10 Pages Posted: 31 Jan 2014 Last revised: 19 Mar 2016

See all articles by Elroy Dimson

Elroy Dimson

University of Cambridge - Judge Business School; European Corporate Governance Institute (ECGI)

Christophe Spaenjers

University of Colorado Boulder - Leeds School of Business

Date Written: January 29, 2014


We review the long-term investment performance of three important categories of emotional assets — stamps, art, and musical instruments. The long-run returns on these collectibles have been superior to the total return from government bonds and Treasury bills (and gold), at least before taking into account differences in transaction costs and other expenses. However, the price volatility of emotional assets is larger than is suggested by the standard deviations of price indexes. The investment risk is further augmented by collectibles’ exposure to fluctuating tastes and fads, and their vulnerability to frauds. Finally, indirect investment in emotional asset markets comes with its own set of problems. The available evidence thus indicates that an investment in collectibles should not be considered lightly. However, even if collectible emotional assets are dominated by financial assets in their risk-return properties, they can still be rational purchases for individuals who derive pleasure from owning them.

Keywords: alternative investments, collectibles, luxury goods, price indexes, investment risks

JEL Classification: G11, Z11

Suggested Citation

Dimson, Elroy and Spaenjers, Christophe, Investing in Emotional Assets (January 29, 2014). Financial Analysts Journal, Vol. 70, No. 2, 2014, pages 18–22, Available at SSRN:

Elroy Dimson

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 700 607 7390 (Fax)

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels

Christophe Spaenjers (Contact Author)

University of Colorado Boulder - Leeds School of Business ( email )

Boulder, CO 80309-0419
United States


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