Most people I know of who buy luxury watches or handbags say they’re a good store of value and can fetch a high resale price in the future. If the market mostly consists of people who buy them for the sole purpose of reselling, wouldn’t that make it a purely speculatively priced item, akin to crypto? How has the luxury market not collapsed?
In: Economics
Some do. Most won’t outperform the s&p 500, but you can’t wear that. The people that I know who are buying the watches and handbags that have a good chance to increase in value also have more money than you expect. So, they are looking to diversify their investments. The luxury item just becomes a hedge like gold for wealthy people trying to park their money somewhere, so there will always be a market. Plus, average people crave status and keep these brands relevant, with the purchase of baseline products.
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