Comparing the three types of investment it found that the stock market had a return of a nominal average of 11.66 percent, with a real return average of 8.65 percent. The most counterfeited handbags of all time and how to spot them Gold had an average annual return of 1.9 percent and a real return average of -1.5 percent, while the value of Birkin bags increased at a faster rate than either of them. Rising by 14.2 percent over the same period, the Hermès bag never fluctuated downwards – instead it steadily and consistently increased reaching a peak surge in 2001 where it escalated by a huge 25 per cent. The Birkin has only ever experienced various levels of positive fluctuation and saw a record-breaking year back in 2015 when a single pink crocodile-skin version sold for an astounding $223,000 (£177,173). So what is it that makes them so valuable? Well the Hermès Birkin bag is a status symbol for the elite and super-rich with its principal appeal lying in its exclusivity. How 225-year-old Goyard became hip-hop’s favourite luxury brand The waiting list for a new one can often be as long as six years, with a bag costing anywhere between $12,000 (£9,534) to more than $200,000 (£251,820) and, because of their allure, they regularly sell on the secondary market through online stores such as Vestaire Collective. If you do manage to get your hands on one though, it could be the safest and least volatile investment available to you. Skip the gold and steer away from the tumbling stock market, according to a new study the best option for long-term investors is to buy a Hermès Birkin bag. According Baghunter, an online marketplace for buying and selling handbags, the Birkin bag outpaced both the S&P 500 and the price of gold in the last 35 years— a time period chosen to reflect the date when Birkin bags were first produced in 1981. They say that the annual return on a Birkin was 14.2%, compared to the S&P average of 8.7% a year and gold’s -1.5%. The bags, which can costs anywhere between $60,000 to $200,000, are made in limited numbers and are not advertised. Quartz attributes its astronomical prices to scarcity: waiting lists for new bags are six years.
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For example, Jeffries reports that “one Himalaya [Birkin bag] bought in 2010 for 29,600 euros was sold – as a pre-owned bag – in 2016 for 157,500 euros.” That represents a “432 percent upswing against about 310 percent if one had bought a Hermès share at the beginning of 2010 and sold it at the end of 2016,” per Jeffries. (Hermès International SCA shares increased in value from 93.31 euros at the end of 2009 to 390.00 euros at the end of 2016). This principal is squarely in line with what Gregory Rohan, the president of Dallas, Texas-based Heritage Auctions told the New York Times in 2014: “If you buy one Hermès bag for $20,000, depending on the popularity, the skin, the color, the size, you can resell it down the road for an average of 60 percent to 150 percent of what you paid for it.” Jefferies cautions, however, that while Hermès Birkins – and sometimes Kelly bags – may be a homerun investment, “most of the top designer handbags such as Chanel, Louis Vuitton and Gucci will (on average) depreciate in value.” News that Christie’s has just sold a Hermès Birkin bag for £155,000 will come as a vulgar surprise to those who think spending more than £19.99 on a single fashion item is completely cuckoo. To the outsider, fashion’s built-in obsolescence makes the idea of investing in anything seem misplaced since, thanks to its six-month renewal cycle, no sooner is your purchase “in” than it is “out” again. But if a fool and her money are soon parted, the adage doesn’t apply to Hermès. Like art, vintage cars and fine jewellery, a Hermès bag could turn out to be a wise investment. That the blue crocodile Birkin, embellished with white gold and diamonds, attracted a worldwide bidding frenzy will come as no surprise to any seasoned fashion-watcher. In the pantheon of designer handbags, nothing tops the desirability of Hermès, the luxury status of which has been unassailable ever since Grace Kelly popularised the brand in the 1950s. While the patronage of Jane Birkin, Kate Moss and Victoria Beckham – once said to have owned more than 100 Birkins – has ensured demand remains buoyant, Hermès’s true covetability lies in its craftsmanship. Each bag is made by a single, highly skilled artisan, and takes upwards of 18 hours to complete. Only the most expensive skins and leathers are ever used. With domestic financial stocks such as banks, housing and real estate expected to be weak in the wake of the election result, novices interested in ditching fintech for fashion should do their homework first. A report last year by the luxury resale site Vestiaire Collective played up three key metrics of a canny fashion investment: quality, durability and rarity, with bags providing the most lucrative returns, recouping an average of 75% of their original retail value, depending on the brand.
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According to Vestaire Collective’s founder, Fanny Moizant, the bag brands that consistently perform best are Hermès, Goyard, Saint Laurent, Céline and Chanel. “The Chanel Timeless has been our bestselling bag since we launched in 2009. If you sold one you would regain almost 80% of its original retail price,” she says. Moizant also tips current It-brand Gucci as a canny investment, and claims its Dionysus bag is retaining up to 90% of its original £1,020 retail price. Other factors likely to increase value include the arrival or departure of a creative director, as well as more practical issues such as keeping your pieces in their original storage, complete with dust bag and authenticity card. Every good capitalist knows that things are only ever worth what someone is prepared to pay for them. And in the case of Hermès, that turns out to be rather a lot.
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