Searching for good alternative investments can be mind troubling for most people as many of us are used to invest in regular and rather traditional financial products. Designer handbags have become an asset to invest in, as unusual it might sound to you. Investors who want the best are always going to be searching for ways to grow their wealth by thinking outside of the box. Investing in designer handbags is exactly that.
The feeling of owning luxury is a sensation that can’t just be put into words. A feeling that is going to put you at the top of the world is making money out off of owning such luxuries. Ina Bernstein has been part of New York’s fashion industry for over 40 years and founder of INA which is New York’s most established designer consignment store. When asked which bags are easier to sell, she replied that “Chanel and Hermès—those are the two brands that I can always reliably sell. Just like anything else in fashion and the world at large, handbags go through trends. If you pick what’s hot, you’ll have a good investment on your hands. But as with picking stocks, you’ll have to get lucky unless you have the necessary market knowledge.”
One of the bags that really signs as an investment asset is the famous Hermès Birkin bag. This purse, named after Jane Birkin, is the gold standard of a rich, sophisticated woman’s status symbol. Over the years, several reports have confirmed the fact that in the last 35 years (since its inception) the bag’s value has risen by more than 500%. This crazy increase in value can be attributed to the fact that the supply is much smaller than the demand for the product, which is driving price growth. Some market analysts suggest that it is a safer investment than the stock market and forecast that the value of Birkin bags is expected to double again in the next 10 years.
A study published by Baghunter back in 2016 compared the performance of the S&P 500 versus gold investments versus the Hermès Birkin bag to see which one resulted in the better investment over time. Between 1980 and 2015, the S&P 500 had returned a nominal average of 11.66%, which equates to a real return average of 8.65% annually. During the same period of time, gold had offered an average annual return of 1.9%, which equates to a real return average of -1.5%. At the same time, Hermès Birkin bags have increased in value, year on year, offering an average annual increase in value of 14.2%. While keeping in mind that over the years, stocks and gold fluctuate with the ups and downs in the economy, the value of the Hermès Birkin bag has never fluctuated downwards and has steadily and consistently increased. The bags experienced a peak surge in value in 2001, increasing in value by 25%, and with the lowest increase in 1986 when the value went up by only 2.1%.
Numbers and stats don’t lie. Buying a designer handbag could be something more than just the average bag. A designer handbag from an investor’s perspective can be the alternative asset that is going to offset the consequences of a financial downturn and minimise his portfolio’s losses.