Rising Stars – One Idea – Look To Luxury Brands

11 Apr
Okay, we are well aware that the markets are in a phase of possibly a market correction but at least a drop. You will be aware that I have previously amended clients’ portfolios in expectation of the current pull back and I personally believe that the markets will drop further, at least in the short-term.
 
Now could be a good time to review decisions to take advantage of buying opportunities, for those who have followed a similar strategy and have avoided the declines – I expect you will be well placed to take advantage of the market opportunities as they unfold.
 
Last year was a good year for the luxury goods industry, with sales rising by over 15%. The market growth has primarily been driven by wealth in emerging markets; and consumers from Asia ex Japan, the Middle East, Eastern Europe and South America buy about half of all luxury goods.
 
Many luxury consumers buy luxury products while travelling overseas, as they may find better prices due to lower taxes and possibly better choice. According to Global Blue (a specialist in processing tax refunds), the most important luxury buyers while travelling are the Chinese, Russians, Japanese and Brazilians. Also, high-end consumption in the US is doing better than expected, adding to the industry’s growth. I believe this has been driven by the financial recovery and lower unemployment rates lifting sentiment among these upper-income consumers.
 
Luxury goods’ is a profitable business and companies have strong balance sheets. I see the outlook for luxury goods remains favorable.

The key to investing is including elements, which add the potential of profit on a risk adjusted return basis but a careful eye needs to be kept to fundamentals, market failings, diversity and asset allocation to help ensure the best potential outcome is achieved.
 
If you need my assistance or have any questions, contact me on the details above – my email address is welshmoneywiz@virginmedia.com
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