How Canadian investors can build wealth with luxury goods and art rather than scary stocks
5 Mins Read
Jane Birkin and her carry-on
Some of the world’s most iconic products weren’t born in boardrooms. They came from moments of pure inconvenience. Case in point: the Hermès Birkin.
In 1983, actress Jane Birkin struggled to fit her straw tote into an airplane’s overhead compartment. Its contents spilled out in front of Jean-Louis Dumas, then CEO of Hermès. The mishap sparked a conversation about the lack of functional handbags.
According to Hermès, Birkin told Dumas she couldn’t find a bag suitable for her needs as a young mother. Dumas began sketching on the spot, and a year later, the Hermès Birkin was introduced.
Originally retailing for US$2,000, the structured leather tote became a symbol of luxury and scarcity. Four decades later, it’s also a high-performing asset. In July, Birkin’s gifted model sold for US$10.1 million at a Sotheby’s auction, setting a new record for the most valuable handbag ever sold at an auction.
Most people assume a five-figure handbag belongs behind glass — something to preserve, not put to work. But Jane had other plans for the accessory that bears her name.
She treated her Birkin like any other handbag: a functional, everyday catchall. By the time it landed at Sotheby’s, The New York Times described the piece as looking like it had been salvaged from a “shipwreck” — frayed handles, worn-in leather and even sticker residue still intact.
“She didn’t treat it as an art piece,” said Adam Leja, a couture collector from Warsaw who attended the auction’s public viewing. “It’s just a normal bag for every day. That’s the amazing thing about it.”
And yet, that’s exactly how it performed.
Luxury handbags, particularly Hermès Birkins, have become some of the most reliable assets in the collectible market. The brand’s scarcity-driven business model, characterized by limited supply and waitlist-only access, has fueled significant appreciation over time.
Consider the Birkin 20 Matte Alligator: while its retail price is around US$78,000, secondary market prices can climb as high as US$115,570 — a return of roughly 2.5 times to 4 times the estimated retail price. Between 1980 and 2015, The Independent reported an average annual rate of 11.66% in the stock market, but not without turbulence, including a 36.55% decline during the 2008 financial crisis.
By contrast, Birkin bags rose an average of 14.2% annually over the same period without a single year of decline. That makes them one of the rare luxury goods that double as a historically stable investment. But if you’re buying a handbag with ROI in mind, don’t take a page from Jane’s playbook. Her well-worn tote may have made history, but for most collectors, condition is everything.
For decades, the stock market has been a cornerstone of long-term wealth building. But recent market turbulence, fueled by shifting trade policies and persistent geopolitical tensions, has chipped away at its once rock-solid reputation. As a result, more investors are branching out into nontraditional assets in search of stability and stronger returns.
“Luxury collectibles have delivered for investors over the long term. If you had invested US$1 million in 2005 and tracked KFLII, your investment would now be worth US$5.4 million,” Liam Bailey, Knight Frank’s global head of research, told [Forbes]. “The same amount invested in the S&P 500 would have been worth US$5 million by the end of 2024.”
This performance gap has put everything from blue-chip art to gold on investors’ radar — assets that not only hedge against inflation but also carry the potential for strong, long-term growth. Fine art, for example, has proven itself as more than just cultural capital.
When a Picasso sold at Sotheby’s for over US$100 million — the first of its kind to cross that mark — it underscored the market’s appetite for rare, tangible assets. And you don’t need $100 million to get in the game. Online platforms now allow everyday investors to buy fractional shares of these high-value works.
Aside from art, gold has long been a go-to for investors looking to diversify beyond traditional assets. Unlike stocks, its value often rises when the dollar falls, making it a hedge against inflation and a tangible store of value.
In a time of uncertainty, investors are seeking more than returns — they’re seeking resilience. Increasingly, that means looking beyond the index to build portfolios that are not only diversified but also durable.
