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If Luxury Stocks Are a Good Inflation Hedge, Why Is No One Buying?

For the trinkets bought by the rich, inflation is running much hotter than for everyday groceries. Even with that enticing hedge, luxury stocks probably aren’t about to fly off the shelf.

Luxury goods have an advantage over other consumer products: When top-end brands charge more, their designs can become more desirable to status-conscious shoppers. This gives the industry a reputation for offering investors inflation protection. Over roughly the last four decades, Forbes’ Cost of Living Extremely Well Index, which tracks the price of goods and services such as luxury handbags, expensive watches and real estate management fees, has risen 5% annually, compared with 3% gains in the U.S. consumer-price index.