There’s no better way to amass wealth than to have your assets do it for you. In making investments, there are a whole lot of means to invest your money, but have you ever thought of the luxury goods industry?
The greater sale of luxury goods covers a vast range of luxury items. Anybody willing to let his cash work for him can easily invest in any or two of these luxury items. These ranges from high fashion watches and jewelry to the most expensive wines and spirits. Also, in the list of luxury goods are artworks, vintage cars, bloodstock, and rare stamps. All of these require a great deal of knowledge to be able to pick the one that will give you a good return, or you might consider buying stocks that have to do with luxury goods.
So, why should you invest in luxury goods?
The luxury goods industry has so far enjoyed worldwide sales of $250 billion. In 2018 alone, the sector registered a huge sales volume, which is expected to improve this year. Globally, the number of households with disposable incomes over the luxury spend level of $75,000 is projected to rise by 6.9% year-on-year in 2019, reaching over 106.3 million households. That said, the continued growth of the numbers in society able to afford luxury products is progressively increasing in both the developed countries, developing countries, and even the underdeveloped countries. This is extremely great news for those who design, invest, or sell them.
Investing in luxury goods companies have some great long-term attractions. Although styles come and go, luxury brands have a better chance of enduring. The luxury industries may look a lot complicated on the surface; it can be very easy and fun once you set your mind on it. Most luxury goods are often associated with being precious, mysterious, magical, classy, and lovely.
The market for these classy goods is ever increasing. The fast-paced creation of wealth in emerging Asian markets adds potential to the luxury goods sector. The fact that the end consumers are typically reliant on wealth rather than income helps lend a degree of stability to demand, although an economic downturn will still likely impact demand.
When you purchase these rare goods, they most certainly retain their value; as a matter of fact, they increase in value over time. The resale value will always yield greater money. Luxury items will always have a buyer, from the new offshoot millionaires and age-long money bags. With the advent of technology making wealth creation faster and easier, the ever-increasing class of millionaires and billionaires likes to get their hands on a couple of luxury items to announce their arrival.
The ever increase in the purchase of luxury goods can be likened to either improvement in peoples levels of taste and discernment or rising levels of people with more money — either which, the demand still soars higher with each passing year.
So, what luxury goods should you invest in?
There is a wide range of luxury items that you can invest in; you can decide from a selection of listed stocks which are operating in the luxury sector or you can even get specialist funds that offer investment in their chosen premium brands portfolio so that you leave it to a fund manager to do the stock-picking for you. It’s all up to you.
From the performance of a dozen selected collectible asset classes over the past couple of years, below are the lists of the most profitable luxury items worth investing.
Classic cars are one of the most profitable investments you can ever think of. The past few years have witnessed an ever-growing surge in demand for vintage cars, irrespective of the high handed price and value of these classy vehicles. According to the Blue Chip index of classic cars, the prices of most 20th century cars have at least doubled since the beginning of 2010, and classic car investment is attracting investors with varying budgets. A 1956 Aston Martin DBR1 can be sold for over $22.5 million. If you get a 1995 McLaren F1 or a Ferrari for about some few million bucks, these same cars will be valued more than twice the price in the next five years.
The price of amazing works of art has witnessed a significant rise in value, and it promises to retain the stride. Buying a painting aside from the joy and happiness it may give you immediately, can also fetch you huge profits in the long run. However, you don’t need to be too carried away by the prospects afforded in picking an artwork; you need to exercise a great degree of caution before picking any piece.
Investment in fine arts is very lucrative. You can buy a painting at a relatively small amount of money and resale for many times the original investment at auction. So far, the record of the highest art painting; the Renaissance by Leonardo da Vinci stands at $450 million.
Fine wines are one of the world’s most luxury assets, serving for both pleasure and profit. Between the years 2003 and 2011, the value of the most sought-after wines rose by 250%, making a huge return on investment. To join the league of those that gain much here, you need to equip yourself with the right information to allow you to make an informed and reasoned decision on your purchases. This is absolutely needful. Wine investments have seen its fair share of fraudsters who have been able to sell wine that is either vastly overvalued or not what you were promised.
Most of the widely-collected and regularly traded fine wines like the Bordeaux has witnessed a fast-paced rise in its value as there has been a great demand for them. Therefore, their prices increased as well. Also, this has lead to the introduction of more buyers who were all mostly driven by profits rather than substance and also a sharp rise in the number of Asian buyers.
There’s never the best time to hit gold in the luxury goods sector than now!