Jan 15, 2016
Worth its weight in Hermes?
Jan 15, 2016
In a research study published by Baghunter.com comparing the iconic Hermes’ Birkin Bags to the S&P 500 and to the value of gold, the bags have outperformed the other two traditional investment vehicles.
Their value has withstood hard economic times and continues to come out ahead. In fact, according to the Baghunter study, Birkin is slated to be the safest investment of of the group in 2016, particularly in the face of the uncertain economy.
Baghunter’s study reveals that Birkins have had a historical “value increase of over 500% in the last 35 years.”
Specifically, Birkin bags average annual returns from 1980-2015 are 11.2%, with the lowest annual returns in that period being 2.1%. The same cannot be said for either S&P 500 or gold, both of which had lows that dipped into the negative digits.
Baghunter chose the past 35 years for its study, which was the time from when Birkins were first available to purchase. In those years, the S&P averaged out at an 8.65% real annual return, and gold, the most popular commodity to invest in, saw an average annual return of only 1.9%.
Baghunter points out that not only did Hermes Birkins never experience a loss, but they have appreciated in value. “While economic factors affect the value of the S&P 500 and gold, the exclusivity of Hermes Birkin bags has seen them maintain and increase their value, even during times of recession.”
Outside of the hard numbers, there is an emotional factor contributing to the value of the Birkin bag. They are very hard to purchase new and are an extremely exclusive item to possess. Waiting lists can be as long as 6 years to purchase one from Hermes. Accordingly, the secondary market is where most of the Birkin trading occurs. Baghunter points out, “[a]s a status symbol for the elite and ultra-rich, the main factor affecting the secondary market for Birkins is desire.”
Baghunter’s study notes that last year, a single pink crocodile Birkin was sold at auction for the record breaking price of $223,000. As Baghunter put it, weighing and balancing the external economic factors that will affect the value of the other vehicles, going into 2016, “the safest and least volatile investment market of the three is certainly Hermes Birkin handbags.”
By Cassidy Mantor
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