Why this Hermes handbag is a better investment than gold
Fashionistas, be prepared for an army of bland men in suits to come your way: it turns out that ultra-expensive Hermes handbags are a legitimately wise investment.
New researchÂ released by Bag Hunter has found that on average, the hypothetical net returns of owning a Hermes Birkin Bag outweigh those of gold and even the stock market.
A Hermes Birkin handbag â€“ which retails for around $30,000 â€“ does not experience the same fluctuations and market risk that gold does, and builds on its resale value consistently year on year.
(A pre-loved Hermes Birkin that sold for $16,000 in 2010. Image: Sequel Communications / AAP)
Sure, you wonâ€™t quite experience the same highs and lows that investing in gold or the stock exchange brings, but you will have one very important market variable: consistency.
According to the researchers, the reason why Hermes Birkin bags are a rock-solid investment is because they manage to stay desirable even when fashion trends swing wildly from one extreme to another.
“As a status symbol for the elite and ultra-rich, the main factor affecting the secondary market for Birkins is desire,” wrote the researchers.
“The waiting list implemented by Hermes for a Birkin bag is sometimes as long as six years, which has also contributed to driving the resale value of Birkin bags upwards with bags regularly selling on the secondary market for more than their original price.”
Citing Birkin-toting celebrities like Kim Kardashian and Victoria Beckham, the researchers argue that a Birkin bag is always in heavy demand and rarely (if ever) in excess supply.
(Victoria Beckham sporting her pink Birkin bag. Image: German Alegria)
To make these claims, the researchers broke down the comparison into three markets: gold, the S&P 500 and Hermes Birkin bags.
Selecting a 35-year period between 1980 (the year Hermes released the bag) and 2015, the researchers then analysed how each market performed year on year.
Over the period, the S&P 500 returned an average of 8.65 percent, gold returned a nominal average of 1.9 percent, and Hermes â€“ well their bags returned a whopping average annual return of 14.2 percent.
(Nicky Hilton with her tan Hermes Birkin bag. Image:Â Bauer-Griffin/GC Images)
Of course, like all investments, there is a caveat: the study assumes that the investor “picked and sticked” in all three markets (meaning they didn’t capitalise on good years, or bail in bad years).
There’s also the issue of portfolio diversification. While it’s possible to “cash in” on certain percentages of your stocks in gold or the S&P 500, a Hermes Birkin Bag is an all-in investment â€“ once you sell it, the entire investment is gone in one go.
Despite this, the researchers do have good news for women (and some men) drooling over the bags.
If you do buy one, you can rest easy in the knowledge that you’re investing in one of the most stable markets ever created: human envy.