Chanel Bag Prices Rise Again in 2024

 

Chanel bags are better financial assets with strong demand

Lagerfeld-designed Chanel handbags are likely to continue benefiting from the scarcity effect in the next few years, in our view, but the brand’s broader evolution in luxury handbags will be determined by the ability to sustain collectors’ excitement going forward. Hermès Birkin bags, in contrast to Chanel bags, have had higher volatility, more comparable to that of global bonds or hedge funds among financial assets, but a better risk-reward than the latter.

 

 

 

Luxury handbags have low volatility, hence providing more stability for investors

Watches and jewellery as well as handbags (especially Chanel handbags) are clearly standing out as stores of value with low volatility (between 2.5% and 5% annually) and low drawdowns. With the exception of pocket watches, their annual returns are 4.5% – 6.5%. Their information ratio (which puts returns in relation to volatility and is thus reflective of the risk-reward) is impressive, with values exceeding 100%, i.e. average returns systematically outpacing fluctuation ranges. Particularly noteworthy are Rolex watches and Chanel handbags, with very strong information ratios of 200% or higher. This means that the average annual return of 10% for Rolex watches for example is double the usual fluctuation range of 5%. Especially in the current volatile market we are in, low volatility sounds pretty good to me!

 

Chanel bags can protect you from inflation and give you extra financial security during recession

As 2022 is marked by a transition to a more elevated inflation regime and higher interest rates, it is relevant to evaluate the sensitivity of the various collectibles to inflation and interest rates (see Figures 4 and 5). The best inflation protection (as measured by performance in extreme inflation periods) is offered by Chanel handbags, followed by traditional Chinese works of art and wristwatches, in particular Rolex. Most vulnerable to more elevated inflation regimes are fine wines, and American and Latin American art. Conversely, classic cars and post war & contemporary art do best in low or normal inflation times. Rolex watches appear to be the ideal inflation all-weather stores of value.

 

 

Is a designer bag considered an investment?

So, if the price has gone up so much, does that make the Chanel Medium Classic Flap bag a good investment? Maybe, maybe not. 

Whether a Chanel bag is considered a good investment comes down to how we define what an investment actually is. In the fashion industry, ‘investment items’ often refer to pieces that stand the test of time, which can be worn over and over again over the years. Given the fact that this bag has been produced since the 1950s, has a classic design and consumer demand for it still remains high, you could consider it a good investment in terms of your cost per wear.

However, if we want to take an economic perspective, an investment is the decision to purchase an asset, which has the potential for future economic gain. In this sense, buying a Chanel bag can be considered investing in an asset if you’re planning to — and able to — sell it in the future. 

Whether this is a good or bad investment comes down to whether you’re able to derive a gain or a loss. And to determine that, we need to look at the second hand market for luxury consumer goods.

 

In conclusion, investing in a Chanel bag is a wise decision due to its timeless design, exceptional craftsmanship, and consistent demand. These elements ensure that Chanel bags not only retain their value but often appreciate over time. As a result, a Chanel bag is not just a luxury accessory but also a sound financial investment, providing both aesthetic pleasure and long-term economic benefits.

 

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