The GameStop Corp saga ignited by overambitious small traders on forums such as Reddit against Wall Street hedge funds continues. But stocks have now been falling in value, closing at $90, a sign that the bubble may be bursting. Attention moved on silver that eventually reached $30 an ounce for the first time in eight-years on Monday. Analysts warned, though, that the silver market is harder to influence and expert share traders also reminded amateur investors to be really carefull since it is easy to quickly lose everything in this game.
But, while we keep an eye on this story and on other possible connections between fashion and finance, let's consider the point we made at the end of yesterday's post - investing in fashion shares.
For those who may not have any insight on finance, but who have an interest in fashion, who always been attracted by the possibility of investing in fashion groups, and have some extra money to spare, there may be an intriguing option – CopyPortfolios.
There are a few sites offering the chance to copy the portfolios of successful investors, but there are also "official" portfolios put together by specific trading sites (for example eToro.com), that allow wanna-be investors to buy shares or fractions of shares from a specific thematic portfolio. So, for example, you may choose between digital commerce, renewable energies or cryptocurrencies.
Fashion has also got a dedicated portfolio on eToro: the multi-asset platform, highlights that the fashion industry is worth over 700$ billion and that quite a few companies have enjoyed stable growth despite challenging times like Coronavirus.
The economy is certainly still suffering from the effects of Covid-19 and we are in a historical situation similar to that of the Spanish flu pandemic in 1918-19. But we may argue that the Spanish flu pandemic was followed by the so-called Roaring Twenties, an ebullient decade of growth that brought with it new fashion, trends and styles. So many predict that's what is expecting us in a post-Covid world. Some experts even foresee a growth for the fashion industry at a compound annual rate (CAGR) of 8.6% between now and 2025.
Now, if you follow the fashion news (not just the runways), you may know in advance which are the most profitable companies to invest in at the right time. For example ,if a company is buying another, shares often rise (this was the case when LVMH Moët Hennessy Louis Vuitton SE completed the acquisition of Tiffany & Co, or when, more recently, Asos bought the inventory and intellection property of Topshop, Topman, HIIT Brands and Miss Selfridge). Keeping an eye on trends may also help you realising which shares may rise (athleisure means brands selling health and welbeing products and sports gear; loungewear shifted instead the attention towards comfort clothes, but also on ecommerce).
Yet investing can be tricky as you may find it difficult to find your way among fashion houses (for example, Christian Dior), fashion conglomerates (such as LVMH Moët Hennessy Louis Vuitton SE or Kering) and fast fashion retailers (think about Hennes & Mauritz AB or Inditex). Thematic portfolios can offer the possibility to diversify across companies, sectors and sub-sectors and receive more benefits in the long-run rather than jumping on the reckless investor bandwagon.
As highlighted in the previous post, though, if you want to do it, you must be aware of the risks and rapid losses associated with trading and investing, especially if you're an amateur in this field. So, if you have $1,000 (that's the minimum you're required to invest in a portfolio like the one you may find on eToro) or more to spend, start thinking what may suit you best - an investment in shares or an investment in designer bags (well, don't forget to consider that the latest luxury bags auctions at Sotheby's proved that accessories can actually be a great investment...) - before jumping at breakneck pace in the financial market.
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