Why Sneakers are the Best Investment Amid the Coronavirus
You probably were thinking before clicking on this article, I’ve never heard of sneakers and investment in the same sentence. Me neither, until one day when I scrolled through the online marketplace StockX and became intrigued by the numerous graphs that depicted a sneaker’s resale price. Here are just a few examples of what caught my attention:
As I jotted down all the sneakers that exhibited similar trends to the ones pictured above, I started to notice common factors, whether it be the collaborator behind the sneaker, silhouette, and even sizing. That’s when I realized the underlying financial opportunity that lies in the streetwear market, one that even outperforms traditional investment markets.
Let’s take the stock market for example. The coronavirus has had its fair share of fun with this market: the ongoing crash has even invoked memories of the Great Recession of 2008. With pressure from President Trump, the Federal Reserve has cut interest rates to 0%, injecting massive amounts of money into the economy. This cut will only hurt us in the long run, as stock prices become a reflection of liquidity rather than the organic growth of companies.
“underlying financial opportunity that lies in the streetwear market, one that even outperforms traditional investment markets”
Resistant to the Coronavirus
However, the streetwear market has reacted in a much less dramatic way. Over the past month, I crafted a sneaker index consisting of the current most popular sneakers. After calculating the percentage changes in resale prices, from the start of the stock market crash on February 20 till now, I discovered astounding data. Compared to the 30% drop the S&P 500, the sneaker market has only gone down 7.15%. This difference affirms that the streetwear industry is here to stay. During a global epidemic like this, people are stocking up on food and supplies. Although one would think that the last thing on their minds is to purchase a brand new pair of expensive sneakers, the global demand for hyped sneakers has only faltered a small amount. In fact, a handful in the sneaker index are even shooting up in price.
The stock market is not the only investment market that is being significantly impacted. Headlines have also been dominated by market crashes in cryptocurrency, real estate, and gold. It seems that sneakers are the only assets resistant to the virus.
Buy Market
The low volatility and lack of correlation with other markets deems sneakers a worthy investment. In fact, the coronavirus has transformed the market into a huge buying opportunity. Resellers are looking to scrap whatever profit they can get and prepare for the uncertainty in the future. As a result, a multitude of sneakers, which I will be covering in the coming weeks, have been decreasing in value and are currently undervalued. However, the market will correct when the virus is conquered, and prices will rise back up.
Who would have thought that your son’s biggest obsession could turn into one of your most fruitful investments?
