It's a common piece of conventional wisdom that the luxury market is insulated from bear markets and cyclical slowdowns. But since the onset of the subprime meltdown and the credit crisis, that bulletproof high-end market is starting to look a little wounded, leaving little doubt that wealthy have started to shift their spending patterns.

Luxury retailers like Saks Fifth Avenue (SKS) and brands like Kate Spade, Juicy Couture and Liz Claiborne (LIZ) have felt the pain as wealthy spenders tighten their wallets, releasing disappointing sales numbers in the wake of the free market’s latest crisis of confidence. Last Friday, reports surfaced that many luxury brands such as Louboutin, Chloe and Chanel will actually cut their prices, a nearly unprecedented move.

All of the numbers point to the fact that that the luxury market is cyclical, admitted Milton Pedraza, CEO of the Luxury Institute, a New York-based independent ratings and research organization. When the unemployment rate goes up, luxury spending typically goes down, but this drop in spending has been much deeper than usual, he said.

“This is the first time in recent memory that wealthy consumers have seen the value of their investment portfolio drop 35%, real estate is down 10% to 20%, and revenue from their businesses is down -- not to mention the recent devaluation of the dollar against the euro,” Pedraza said. “It’s a triple whammy effect that’s not previously been seen by wealthy consumers.”

That perfect storm of financial fallout has chipped away at the confidence of wealthy American consumers. The Affluent American Research Center, an Alpharetta, Ga.-based market-research firm, conducts a twice-annual survey of 11.2 million households, representative of the wealthiest 10% of U.S. households. The survey conducted this past September found that the percentage of affluent households that were planning to make a major purchase, such a new auto, boat or vacation home, had dropped to historic lows.

“Fifty-four percent of those we surveyed said they have no plans for any one of eight major purchases that we asked them about, and that’s about 10 points higher than we normally would find,” said Ron Kurtz, president of the association. So there has been a bump up in plans to avoid buying the major items”

There is still spending going on by the rich. High-end department store Neiman Marcus reported a 14.5% decrease in sales during its last quarter, yet its famously extravagant holiday catalogue The Christmas Book’s gift items are still widely popular

“We have had roughly the same amount of interest in the over-the-top gifts as we have had in the past,” said Ginger Reeder, a spokesperson for Neiman Marcus, in an email to FOXBusiness.com. “The car did not sell out immediately, as has often been the case, however, it was the most expensive we have offered and included a trip, so that may have factored in. Overall, the number of calls in regard to these gifts is consistent with past years.”

Kurtz said some of the goods and services available only to those in the richest 1% and above may not suffer quite as much, because they are demanded by households with an extremely high net worth, which isn’t impacted as much by fluctuations in income. This would explain why the extravagant gift items in Neiman Marcus's catalogue are selling out and why demand for expensive services, like flight lessons, has remained stable.

Lewis Liebert, president and CEO of Performance Flight, a White Plains, N.Y.-based boutique flight training center, said he has seen business grow steadily despite rising unemployment in the New York area and large losses in the stock market. A single flight lesson at Performance Flight can cost as much as $800, but because much of Liebert’s clientele has an exceptionally high net worth, even in difficult economic times, they can afford it.

“The big problem for these people is not usually the money -- it’s time,” Liebert said. “For some folks, this period of unemployment could actually be a benefit to their flight training.”

Even though the disposable income of the mega-rich has not been directly affected by the downturn, America's millionaires and billionaires are still changing their spending patterns.

“Across the board, there’s been a flight to quality among the wealthiest people, Pedraza said. “The brands that will sustain their value are those that have one-of-a-kind, quality items like the ‘Kelly’ bag by Hermes. The wealthy are looking for products known for quality and long-term value.”

Pedraza said the consumers who can afford to spend money on luxury brand items, do not necessarily want other people to know they're doing it.

“Right now, the less label, the better,” Pedraza continued. “I’ve spoken to a couple of senior-level guys at luxury retailers, and they’ve told me that a lot of wealthy shoppers are asking for unmarked bags when they leave -- so they really want to be off the radar.”