Earlier this year, in the midst of the worst economic downturn since the Great Depression, a Time magazine cover story described changing consumer behavior as “The New Frugality.”

The article argued that the “Great Recession” of 2009 now has permanently altered our spending habits. This shift in spending from high-priced luxury goods to more cost-conscious bargain shopping, so the story goes, will have a lasting effect on the fate of many of the world’s highest-profile luxury goods makers.

Well, to those who say that luxury goods are out of favor for good, I say — no way! In fact, now that the worst of the economic scare has passed, I’m betting that luxury retail stocks are going to make a big comeback in 2010. As an investor, it’s your job to make sure you have at least a few of these stellar brands in your “luxury portfolio.”

Here are five great luxury stocks to buy now.

Luxury Stock #1 – Tiffany & Co. (TIF)

Perhaps the quintessential luxury goods brand, Tiffany & Co. (TIF) and the gift of its signature little blue box, never fails to put a smile on that special lady’s face.

Tiffany shares have certainly put a smile on investors’ faces in 2009. The stock is up nearly 60% year to date, and over the past six months, the shares are up an amazing 115%.

When it comes to earnings, the company’s second quarter was, as investment firm Jeffries put it, “inspiring.” The company easily beat Q2 earnings while showing the first quarter-over-quarter improvement in five quarters. Tiffany also raised guidance for the full year.

Yes, Tiffany is back in a big way, and it’s a must-own luxury stock.

Luxury Stock #2 – Coach (COH)

Another company vying for the hearts, and arms, of the women is Coach (COH). The handbag, wallet, luggage and assorted luxury accessories maker has global appeal, as do the company’s shares. Coach shares are up a very strong 46% year to date, and over the past six months, the stock has surged nearly 160%.

The stock was recently upgraded to “buy” from “neutral” by Bank of America-Merrill Lynch, based in part to the company’s introduction of the Poppy collection of slightly lower-priced handbags and accessories.

Now with Coach, you get the benefit of a great luxury brand that caters to high-end consumers, while also benefiting from the sales of its new affordable items. It’s the best of both worlds for your luxury stock portfolio.

Luxury Stock #3 – Nordstrom (JWN)

Anyone who has ever been to a Nordstrom (JWN) department store knows first hand that the service here is about as luxury as it gets. Top-shelf customer attention combined with high-end merchandise equals luxury stock, and Nordstrom will be a winner
for your portfolio going forward.

Like Tiffany and Coach, Wall Street has certainly smiled on Nordstrom shares in 2009. The stock is up nearly 120% year to date, and over the past six months, JWN shares are up a remarkable 140%.

On the earnings front, August brought us the company’s second-quarter report, which was in line with analysts’ estimates. But the real news emanating from the Nordstrom Q2 earnings call was their revised 2009 outlook. The company said it expects fiscal 2009 earnings of between $1.50 and $1.65 per share, up from previous guidance of $1.25 to $1.50 per share. That revised outlook means things are getting better for luxury retailers, and that means it’s time to jump on the luxury stock bandwagon.

Luxury Stock #4 – Diageo (DEO)

Diageo (DEO) is in the premium spirits, beer and wine business, producing such brands as Johnnie Walker, Guiness and Bailey’s. Based on the most recent numbers for the libations maker, I can see that I am not the only one who enjoys the luxury of a cocktail.

For the full year ended June 30, 2009, Diageo saw a 15% increase in net sales to £9,311m, compared to the previous year’s £8,090m. Earnings per share also grew nicely, up 10% over last year.

As for DEO shares, they, too, have been spirited, although not as drunk with optimism as our first three luxury stocks. Year-to-date, DEO is up 13%, and in the past six months, the shares have jumped 49%.

I suspect that people will continue enjoying the company’s high-end brands, and as a sign of my commitment to the firm, I pledge to do my very best to personally make sure their Johnnie Walker Scotch division meets its sales goals for 2009.

Luxury Stock #5 – Apple (AAPL)

Apple (AAPL) is not a company you immediately think of when it comes to luxury goods, but for those of us who belong to the Apple cult, it’s a luxury we couldn’t do without. The company not only makes the most expensive computers out there, it also
makes the high-end iPhone. But to those of us addicted to anything Steve Jobs brings to market, money is really no object.

Apparently, I’m not the only one who feels this way. The company’s most recent earnings beat was just the latest in a string of consistently better-than-expected quarterly performances. And when it comes to what Wall Street thinks, well, I suspect over 100% returns both year-to-date and over the past six months in AAPL shares tells you what you need to know about the stock’s appeal.

The Apple juggernaut is perhaps the best personal technology company operating today. The company’s uncanny ability to consistently bring some of the best, most addictive, and dare I say, coolest products to the market year after year has made it one of the greatest success stories in all of corporate history.

Put this stock in your luxury portfolio, your tech portfolio, your retirement portfolio — or any portfolio.