The Hermès Birkin Handbag

More valuable than gold.

Daily Edit: Hermes Bag vs. Gold

If one is looking to invest, the regular considerations might include Amazon, Google, Apple—even penny stocks (as one philosophy suggests, where is there to go but up?). Yet recent research indicates the most lucrative investment might not be in gold, one of the more popular choices; rather, it is in legendary French fashion label Hermès, and their elusive Birkin handbag.

Baghunter’s study compares S&P 500’s—or Standard & Poor’s 500, the American stock market index and an overall return of the market as a whole—gold’s, and Birkin’s status on the market from 1980, the year Birkin was born, to 2015. To standardize the study, Baghunter assumes the investor in each category did not buy or sell over the 35 years. The results are as follows: the S&P 500 real return average was 8.65 per cent; for gold, -1.5 per cent; and for Birkin, there was an average annual increase of 14.2 per cent. More astonishing yet: in those 35 years, the value of the Birkin handbag increased over 500 per cent, never once decreasing in value (as opposed to gold and S&P, which both experienced stark lows, dragging down their averages); its smallest increase was 2.1 per cent in 1986.

This might sound enticing, but legend has it that one does not simply purchase a Birkin handbag. The commodity is notoriously difficult to get a hold of, with many current and past owners claiming a longstanding relationship with an Hermès sales associate is mandatory, and a dedication to the brand an asset, this sense of heightened prestige and priceless word-of-mouth marketing undeniably contributing to the handbag’s market success. Yet it all might be worth the trouble—a $60,000 USD Birkin handbag recently sold for $223,000 USD on the auction block. Best start cultivating that relationship with the sales associate soon, though; Baghunter predicts the price for a Birkin handbag will double in the next 10 years.

Photo by Wen-Cheng Liu via Flickr.