The global economy is growing, especially in emerging markets, many people are overpaying. Investors can participate in the luxury of others – the richest man in Europe did it.
It is a disturbing development: worldwide, the gap between rich and poor is growing. While millions of people are affected by poverty and hardship on the one hand, wealthy people are accumulating ever greater wealth. New figures came from the Boston Consulting Group this week: there are now 22.1 million millionaires in the world, and they alone own about half of the world’s private wealth. Three years ago, the share of millionaires in total assets was 43 percent.
Investors who are not troubled by moral issues are thus given a clear investment option: the stocks of luxury goods manufacturers. The French brand conglomerate LVMH stock market chart show, the US cosmetics giant Estée Lauder, the Swiss Richemont Group stock market chart, which specializes mainly in jewelry and watches, and many more: the stock prices of these companies are in recent months and For the most part, it has risen sharply for years. The World Luxury Index, for example, summarizes the prices of the 20 largest and most liquid companies in the sector. The stock index has risen more than 60 percent over the past three years.
The price gains go along with a generally pleasing development on the world stock exchanges. However, a glance at the figures shows that the upturn in luxury stocks is not completely explained. For example, the German leading index Dax stock market chart showed an increase of only about 24 percent over the same period. After all, it was a good 40 percent of the broad US index S & P 500.
The example of the Frenchman Bernard Arnault shows how attractive the sector can be. The luxury entrepreneur (LVMH, Christian Dior) has been one of the richest people in the world for years. Recently, Arnault passed another milestone: as the first European, he has a private fortune of more than $ 100 billion. Arnault has become rich – with luxury stocks.
So where did the luxury segment’s outperformance come from? Undoubtedly, the strong growth of this market worldwide, which benefits above all the leading companies in the sector. According to a study by the consulting firm Bain & Company, total luxury goods sales rose by 5 percent last year to 1.2 trillion euros. By comparison, this roughly corresponds to the size of the gross domestic product of Spain. Personal luxury goods such as shoes, handbags and cosmetics accounted for 260 billion euros, an increase of 6 percent over the previous year.
An analysis by the consulting firm Deloitte shows who cuts most of the cake: Thus, nearly 50 percent of the sales of the largest 100 luxury companies worldwide accounts for the global top ten in the industry. Seven of these top ten luxury companies have recently seen double-digit revenue growth, according to Deloitte. First and foremost: industry greats such as LVMH, Estée Lauder, the French fashion and accessories company Kering and the Chow Tai Fook Jewelery Group based in Hong Kong.
The engine for the growth of these companies has been in the Far East for years. In any case, emerging economies, with their rapidly increasing wealth in the circles of the successful, offer the best business opportunities for luxury companies. Because people who are new to too much money are often more inclined to show their wealth than those who have been used to wealth for generations.
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