to give watches the time of day (pardon the pun). They are not only fashion accessories, but also nowadays a high technological device that can be even used in sports competitions. Every referee in the matches between NFL playoff favorites wears one to chronometer the game.
However, for bold investors and those looking to hedge the value of their money, watches have turned out to be a surprisingly rewarding investment.
The sale of Paul Newman’s 1968 Rolex Daytona for a whopping $17.8 million had punters scrambling to snap up vintage timepieces from Rolex and Patek Philippe amongst others. While some claim that the huge price tag was partly thanks to Paul Newman’s fame, high-end watches have been proven to be a rather solid purchase.
Unlike other investments, watches are indeed subject to trends and changing market sentiments. While premier timepieces are wondrous works of art with countless hours of labour put in, they are still an accessory at the end of the day. Unlike classic cars and property, their tangible value is significantly less than that of other investments.
However, watches rarely depreciate in value and do not require any significant maintenance unlike a New York penthouse or a Lamborghini Miura. Whether you’re looking at an Omega or a Tudor, here are some points to look out for when investing in watches.
What you need to know about investing:
1. Start your collection with the greats
Unless you’re a regular investor, it’s best that you stick to what you know. When looking to build your collection, Steven Kivel of NY’s Central Watch advises that you stick with known brands such as Rolex and Patek Philippe.
From the Rolex Submariner to Patek Philippe’s exquisite Nautilus, chances are you can’t go wrong with a classic. Along with this, as we’ve seen from the sale of Paul Newman’s Daytona, one can expect prices of Rolex timepieces to steadily increase with time.
Experts have cited that classic, desirable pieces will always have a special place in the hearts of investors. While the initial outlay may be steep, these classics will form the lynchpin of your watch collection.
2. Do your research
Fundamental to any investment, research and getting your groundwork done is vital if you are to succeed. Oftentimes, amateur investors make the mistake of purchasing the most expensive watch that they can in the hopes of jumping on the bandwagon.
Don’t make such a mistake.
Instead, do your research and check-in with experts in the industry or other investors. Usually, punters in the industry have their finger on the pulse and are often ahead of the game. For example, before Paul Newman’s Rolex Daytona was sold, the watch was often regarded as “undesirable” and usually sold at half the price.
However, many failed to appreciate the celebrity factor; how Paul Newman, the coolest man in the world added his own sense of panache to the watch. Now the watch that once started from humble sporting roots has a waiting list of 10 years. Let that sink in.
3. Play the long game
The rule of economics states that when supply falls, demand will naturally increase in turn. This can in turn be applied to investing in watches. Vintage investments only have a finite supply in the market which drives their desirability. Timepieces, cars, antique furniture and wine all have such characteristics.
While vintage timepieces tend to be priced beyond most of us, watches nearing the end of their production run are worth looking into. These watches tend to not be ridiculously expensive which makes then an erstwhile purchase. Along with this, after being discontinued the sudden drop in supply can drive prices up thus allowing your investment to appreciate.
Investing in timepieces can be a very rewarding experience from a financial standpoint. With some careful investment and thorough research, you would have no trouble building a solid watch portfolio.