Join our community of smart investors

How to add luxury to your portfolio

There are multiple ways of diversifying a portfolio with luxury.... but be aware of the risks
How to add luxury to your portfolio
  • There are many different ways to invest in luxury
  • If you buy directly, make sure you’re on top of the risks
  • Luxury brands have performed very well this year

Rolex watches, Hermes bags, burgundy wine, a night at the Amman hotel…. none seems particularly desirable in the throes of a pandemic. Yet despite the initial shock when the global economy shut down last March, 'revenge spending' on the finer things has seen the sector thrive as aspirational consumers splash excess savings on luxury items.

According to consultancy Bain & Company’s annual luxury study, which it says covers 80 per cent of the total market led by luxury cars, luxury hospitality and personal luxury goods, the overall market shrank by 20 per cent last year. But figures from luxury goods makers this year tell a very different story. For example, LVMH (FR:MC) – maker of Louis Vuitton handbags and Moët champagne – reported last week that revenue in the second quarter was 14 per cent higher than in the same period in 2019, before the pandemic. Taking a step back, and Bain’s study shows that the luxury goods market has proved a thriving industry with a compound annual growth rate of 6 per cent since 1996.   

To continue reading...
Join our Community of Smart Investors
  • Independent full-length company analysis
  • Actionable investment ideas and recommendations
  • Expert investment tools and data
  • Stock screens from Algy Hall
Have an account? Sign in