If you’re looking for a colourful addition to your investment portfolio, then makeup stocks might fit the bill. Makeup stocks are part of a wider category of stocks in cosmetic companies that produce makeup, lotions, perfumes and hair products.
A lot of makeup companies are owned by larger parent companies, so it will take a bit of research to find out how to invest in makeup stocks.
Here are some examples of makeup stocks or parent companies of makeup brands.
Cosmetics are, to some extent, considered to be a staple. This means that, like other staples such as food, electricity and water, people will still continue to buy them even when stocks are falling.
This is helped by beauty bloggers and beauty vloggers on Instagram, TikTok and YouTube increasing the popularity of makeup and even influencing consumers to use more expensive brands. Makeup is now considered to be art, and its ability to improve confidence makes it an integral part of a self care routine.
Between 2024-2028 the market is expected to grow at an annual rate of 3.33%. Research has discovered that those who use cosmetics aren’t willing to decrease what they spend on beauty products, even with less disposable income on hand.
The cosmetics industry has staying power — makeup has existed for hundreds of years and if recent market trends are anything to judge by, the industry isn’t going anywhere.
While makeup is considered a staple, it’s not necessarily an essential item. While these stocks did continue to perform well during the coronavirus pandemic, it may have been helped by a need for self care during such a difficult time.
Makeup isn’t immune to volatility – a shift to online shopping could give smaller independent companies a boost while hindering larger, well known brands. Make sure you look at long term plans for the companies you want to invest in, such as future innovation and product launches.
Makeup stocks can be a way of adding some diversification to your investment portfolio, even if you don’t highlight, contour or blend yourself. Cosmetics companies tend to perform well, and have done even during the coronavirus pandemic, so it’ll be exciting to see what’s next for them.
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