Investing in luxury goods is an alternative way to make a good business, if of course, you have money available to start making one of the best investments possible.
It is not a conventional form of financial investment, such as a Fixed Income or Variable Income fund, but it still generates good returns.
You have no idea how much a designer handbag can appreciate in value in the short term!
How does the luxury market work?
The luxury market works independently from other types of investment.
But like any niche market, you must be aware of the current financial market and its trends.
As luxury items are very expensive and only part of the population has access to the industry and retail luxury goods, these items have become an attraction for those who had an emergency reserve in the post-pandemic, and want to use their money in some financial application.
These items are valued as the years go by, and are no longer chosen products in a shop window, but rather collectors' items.
Why invest in luxury goods?
Starting to invest is not an easy task, after all, you need to choose between making investments in Fixed Income or investing in real estate funds or perhaps in direct treasury bonds. But this is not the only difficulty.
You need to understand the difference of information with the treasury selic and the selic rate, and how they are defined and whether or not they influence your investment.
Faced with so much information about investments, why invest in luxury goods?
Investing in luxury goods has many benefits, but you need to identify characteristics that help you choose the best possible investment option:
Positive points
- Personal investment: The person wears the item and keeps it to use at another time. One does not purchase a luxury item to resell;
- Security: We can deal with two types of security: relative to physical movement and financial movement.physical security implies that if they are small items, such as jewelry and handbags, the movement of these items is easy.the other security is the investment risk, which in this case is minimal, because luxury items are usually valued;
- Low Competitiveness: Since purchasing luxury items is not possible for everyone, the competitiveness for reselling a luxury item is minimal.
Negative points
- Low liquidity: Low liquidity is the characteristic of assets that cannot be turned into cash (liquid asset) quickly. For example, luxury goods;
- Technical knowledge: Each luxury item traded has individual characteristics that require some specific knowledge and to not lose money on resale, you need to know this business well.
