If you’re looking for a market that promises to be around for a long time, you’ll find luxury goods hard to beat. Although not entirely immune to the impact of a global recession, the luxury goods industry is remarkably resilient, continuing to flourish even during difficult times.
There are many investment options, but directly purchasing luxury goods for a later onward sale isn’t always possible. Practical issues with storage and the physical transfer of goods mean that many investors prefer to explore other options.
And there are plenty of other ways to invest in luxury brands, even without physical ownership. Here’s a look at some of the different ways you can invest in a brand without buying their goods.
Finding an Opportunity to Invest
True luxury brands are timeless and able to withstand passing trends while still retaining their value and allure. The key to all of this is having tight control of their image and brand, which most of them manage by keeping everything in-house.
What this means in practical terms is that they don’t open themselves up readily to shareholders. Some of the top luxury brands in the world, such as Chanel and Armani, are privately owned, with no option of purchasing shares on the stock market.
This doesn’t mean that you need to give up altogether. Some brands are traded on the stock market but under the company owner’s name, rather than the more recognizable subsidiary. For example, Alexander McQueen, Yves Saint Lauren, and Gucci are all luxury household brands, but have you heard of Kering? Kering is the Paris owner of these luxury labels and is available on the stock market for trading.
Richemont is another stockmarket tip; they’re the parent company to Dunhill, Cartier, Purdey, and Montblanc.
Shares in luxury brands are often seen as a smart move, providing you pick a company whose popularity is not on the wane. This is because the luxury brand market is incredibly hard to break for newcomers. Part of the appeal of a luxury brand is the history and longevity; this protects well-established luxury brands, making it easier for them to outperform new arrivals.
Of course, the value of a luxury brand can fall, and they’re not totally impervious to economic challenges. However, if you choose well and are prepared to stick with them for the longer term, it’s hard to argue against the value you’ll find in this sector.
Spread Betting on the Price
Spread betting is a way of speculating on the price of goods. You can potentially spread bet on anything listed on the stock market. You don’t ever take ownership of the luxury goods, and you can close the trade whenever you reach a price you’re happy with.
One of the easiest ways to take advantage of the movement in the market, as you never physically own any of the goods. This is how spread betting can be applied to different kinds of markets and still work well in them all. You don’t need to worry about having space, or about any tax implications as it’s never an actual asset.
One of the other benefits of this type of speculation is that you can also short a stock, meaning, If you think there’s a brand that will undergo difficult times, you can still make money by placing a spread bet in the right direction!
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