To gain insight into the world of rare collectibles, this infographic summarizes the biggest auction sales of 2021, spread across 12 different item categories.
The Numbers
The key details of these sales are listed below in tabular format. Some broke all-time records, while others set the record for 2021 specifically.
The Details
Here are some interesting facts and details about these rare collectibles, starting with:
Pablo Picasso’s Femme assise près d’une fenêtre (Marie-Thérèse)
This 1932 painting is a depiction of Picasso’s lover, Marie-Thérèse Walter (1909-1977). Walter is believed to have had a significant impact on Picasso’s work, and the pair had a child out-of-wedlock in 1935. Sold by Christie’s in New York, this was the first painting to auction for over $100 million in nearly two years. The all-time record holder is Leonardo da Vinci’s Salvator Mundi, which sold for $450 million in 2016 to Mohammed Bin Salman, the Crown Prince of Saudi Arabia.
1995 McLaren F1
Produced between 1992 and 1998, the McLaren F1 is widely regarded as one of the most desirable supercars in the world. It features many innovations that are still rare in modern road cars, including a carbon fiber monocoque (the main structure of the car), active aerodynamics on the underbody, and a centered driving position. The F1’s legacy is cemented by the fact that only 106 were ever produced, many of which have been owned by celebrities. That includes Elon Musk, who famously crashed his F1 in 2000 without insurance. The specific car highlighted above was sold by Gooding & Company, a classic car auction company. It has just 242 miles (390 km) on the clock, which translates to an average of 9.3 miles (15 km) being driven on the road per year.
1933 Double Eagle Coin
The 1933 Double Eagle is one of the last $20 gold coins ever produced in the United States. It dates back to an era when the U.S. dollar’s value was tied to gold, which is a system known as the gold standard. The coins were melted down when the U.S. transitioned to fiat money, and only 13 examples are known to exist today. After selling for $18.9 million, this Double Eagle holds the title as the most valuable rare coin in the world.
The Revolver Used to Kill Billy the Kid
The Colt single-action revolver that was used to kill Billy the Kid is now the most expensive firearm ever sold at an auction. It belonged to Sheriff Pat Garrett, who killed Billy in 1881. Billy is one of the most notorious figures from America’s wild west era and was responsible for the deaths of eight men, including two sheriff’s deputies during an escape from jail. Because of Billy’s legacy, this revolver is lauded as one of the most desirable Western firearms in existence. Surprisingly, it was the gun’s first appearance in a public auction.
Final Text of the United States Constitution
This first-edition copy of the U.S. constitution is an incredibly rare and historically significant artifact. The story of how it sold is equally as impressive. Bidding came down to two parties, one of which was Ken Griffin, billionaire CEO of Citadel. If you’re an investor, that name may sound familiar—Citadel was a hedge fund involved in the r/wallstreetbets saga of 2021. The other party was ConstitutionDAO, a group of 17,000+ crypto investors who pooled together $47 million worth of Ethereum. The term “DAO” refers to a decentralized autonomous organization, which is an online entity that’s collectively owned by its members without centralized leadership—and that takes action based on transparent rules set on a public blockchain. In the end, the copy was sold to Griffin for a total of $43.2 million. Organizers of ConstitutionDAO could not place a higher bid because they wouldn’t have had enough money to insure, store, and transport the document.
About Those NFTs…
NFTs only exist in the digital realm, but they’ve quickly become some of the world’s most valuable collectibles. How valuable, you may ask? For starters, consider the $7.6 million sale of CryptoPunk #3100, a profile picture (PFP) NFT that depicts a blue zombie. Then there’s The Merge, a digital artwork comprised of 312,686 pieces. In December 2021, it was sold to a collective of 28,983 buyers who, altogether, paid $91.8 million. All of this hype has led some of the world’s oldest auction houses to begin selling NFTs through online events. This includes Christie’s (founded in 1766), which surpassed $100 million in NFT auction sales in less than a year. Whether this momentum can carry forward is questionable. Interest in NFTs has plummeted, and crypto markets remain incredibly volatile. on Last year, stock and bond returns tumbled after the Federal Reserve hiked interest rates at the fastest speed in 40 years. It was the first time in decades that both asset classes posted negative annual investment returns in tandem. Over four decades, this has happened 2.4% of the time across any 12-month rolling period. To look at how various stock and bond asset allocations have performed over history—and their broader correlations—the above graphic charts their best, worst, and average returns, using data from Vanguard.
How Has Asset Allocation Impacted Returns?
Based on data between 1926 and 2019, the table below looks at the spectrum of market returns of different asset allocations:
We can see that a portfolio made entirely of stocks returned 10.3% on average, the highest across all asset allocations. Of course, this came with wider return variance, hitting an annual low of -43% and a high of 54%.
A traditional 60/40 portfolio—which has lost its luster in recent years as low interest rates have led to lower bond returns—saw an average historical return of 8.8%. As interest rates have climbed in recent years, this may widen its appeal once again as bond returns may rise.
Meanwhile, a 100% bond portfolio averaged 5.3% in annual returns over the period. Bonds typically serve as a hedge against portfolio losses thanks to their typically negative historical correlation to stocks.
A Closer Look at Historical Correlations
To understand how 2022 was an outlier in terms of asset correlations we can look at the graphic below:
The last time stocks and bonds moved together in a negative direction was in 1969. At the time, inflation was accelerating and the Fed was hiking interest rates to cool rising costs. In fact, historically, when inflation surges, stocks and bonds have often moved in similar directions. Underscoring this divergence is real interest rate volatility. When real interest rates are a driving force in the market, as we have seen in the last year, it hurts both stock and bond returns. This is because higher interest rates can reduce the future cash flows of these investments. Adding another layer is the level of risk appetite among investors. When the economic outlook is uncertain and interest rate volatility is high, investors are more likely to take risk off their portfolios and demand higher returns for taking on higher risk. This can push down equity and bond prices. On the other hand, if the economic outlook is positive, investors may be willing to take on more risk, in turn potentially boosting equity prices.
Current Investment Returns in Context
Today, financial markets are seeing sharp swings as the ripple effects of higher interest rates are sinking in. For investors, historical data provides insight on long-term asset allocation trends. Over the last century, cycles of high interest rates have come and gone. Both equity and bond investment returns have been resilient for investors who stay the course.
