5th Jun 09
Watches – A New Investment Opportunity?
by Adam Dunning
Time – we all want more of it. Some investors are actively chasing this elusive commodity by investing in timepieces, including watches. In fact, in 2007, an Audemars Piguet, Genève wristwatch sold for $333,200 at auction. Vintage Rolex wristwatches regularly fetch handsome prices. They not only hold their value, they increase it, and savvy investors are noticing. There are several other brands that are purchased not only for their timekeeping and fashion qualities, but for their ability to hold or increase their value.
The most expensive watch in the world
The market for collectibles of all kinds has been rising steadily for several years. Even in the current economic climate, collectibles have held steadier than many other forms of investment. Perhaps it’s our longing for a bygone time, when things were simpler and a little more secure.
Besides serving as timepieces, collectible watches often function as jewellery, too. They are often made from precious metals, either in whole or in part. Gold and silver, even platinum can make up everything from the hands to the springs to the case. Gemstones can be included in the watch, often found along the outside of the case or to mark each numeral.
Decent watches are the sign of serious wealth these days
Specific features of watches can also affect their value. Things like alarms, chronographs, waterproof depth, or even the specific watchmaker who produced the item can affect value. Mechanical workings, rather than quartz movement, are much preferred in investment-quality watches.
Like any other investment, making smart decisions on investment timepieces involves a learning curve. One of the first things to learn is how to spot a fake from the real thing. Price is not necessarily a good indication. Request a certificate of authenticity or a certificate or origin – and sometimes even these should be checked out. Higher-end pieces carry a manufacturer’s stamp that is fine and clear. Most also have serial numbers that can be verified. Doing so will often produce a wonderful history of the watch, who owned it, and when – which can add to its value, especially if you discover that someone noteworthy once owned it.
Check the details, you could be on for a winner
The rarer a watch is, the more it will hold its value or even increase in value. Today, many watches, even expensive ones, are built from parts from different manufacturers. Look for watches where a single maker has built all or most of a particular watch. Also, special editions of watches will command more money than a “standard” watch by the same manufacturer. The smaller the special edition issue – preferably under 100 watches – the more valuable those watches will be.
Another thing to consider is the rate of value increase. Using the Internet, you can become familiar with the retail price for new investment-quality watches of various brands. Then look at sales figures for the same or similar models from 5, 10, or even 20 years ago. Have they gone up or down in value? What is the annualized rate of return? Just remember that watches are considered long-term investments. These are not items that you’ll buy today and sell next week. Much like paintings, they are also “emotional” investments, purchased in part because you enjoy owning, using or looking at the item. In the end, though, one must remember that you purchased it ultimately as an investment, and standard due diligence rules still apply.
Don’t get caught out in the Watch world
Because of the artistry involved, many watches are considered works of art, especially if they have intricate faces or chronographs. Some of the older timepieces, in particular, have beautiful artwork and engraving on the watch that is rarely seen today, and these can fetch top dollar at auction houses. Pocket watches can include beautifully engraved cases and even stems.
Interestingly, older watches do not have to be in spotless condition to attract high prices. While they should obviously not be in bad shape, a touch of tarnish here and there on some of the sterling silver or a rare, minor defect in one particular watch of a famous model can actually increase the value. Much like coins or currencies that have rare minting errors, sometimes the value is enhanced by these instances, rather than degraded.
You find an old one, you might get yourself a cracker
Buy your watch from a respected company that deals in investment watches or from auction houses like Christie’s or Sotheby’s. These locations know authentic, quality instruments and you’re extremely unlikely to purchase a fake watch or one that’s below investment grade at these companies.
Be prepared to spend investment-grade money, though. Your first few watch investments can set you back £1000 to £2000, with watches purchased by seasoned investors quickly moving toward the stratosphere. Several watches available at Christie’s are currently listed for over £30,000.
It all comes down to money
Once purchased, your watch will need to be cared for. Before investing in watches, be sure that you have found a reputable watchmaker to keep your piece in prime condition. Watches, like all other types of “emotional” investments, can quickly lose value if their quality diminishes. The person who services and maintains your timepieces should be familiar with the brand or brands in which you invest, and be able to obtain any necessary parts if repairs are required. In fact, finding an investment-quality watch in need of some repair can be a good investment move IF you’ll be able to return it to prime condition without making a second major investment. This type of investment involves more risk because the needed repairs may be more than anticipated. Also, once repaired, the watch may not garner the interest or price that you’d imagined. But because of that risk, your rewards can be quite impressive. Especially if you can obtain a rare watch that for some reason has gone untended for a while, the rate of return can be quite rewarding.
Rarer than a Gordon Brown Prime Minister Christmas Party 2009
Doing your research is probably the most important part of the equation. Knowing exactly what you’re looking at, what its current worth is, as well as what it could be worth in the future, will be keys to helping you find a timepiece that will make you happy today, as well as later. Once you determine how much the “emotional” part of the investment is worth to you, then you can decide how much you’re willing to invest in a strictly financial sense.
Our Stories
- Awesome Ways to Be Proper Scary at Halloween
- How much for love?
- Days of Distraction for under £10
- Celebrities Phones You Wouldn’t Bother Hacking
- The Best Holidays to Do with the Kids
- The Best, The Worst, The Most Expensive and The Cheapest
- Happy Days, Unkempt Nights: The Best and Worst of Music Festivals
- This Summer’s Top Fashion Trends
- The Best Internet Browsers and Why You Should Care
- Best Apps for Shopping
- The Top Summer Blockbusters of 2011
- Five Nights, Four Bank Holidays: Royal Special!
Popular Topics
Amazon ASDA Bonfire Night Celebrity Weddings Cheap Children In Need Christmas Christmas Presents Christmas Shopping Costume Discount Vouchers Fancydress fireworks Flat screen Food Gifts guy fawkes Halfords Halloween Harrods KFC Lady Gaga lastminute.com LCD LG lidl mobile phones Nokia Pizza Express Pizza Hut Plasma Poundland Samsung Shopping Simon Cowell Sony Stocking Fillers T.M.Lewin Tesco Toys TVs Waitrose Walmart what-if-nans-present-is-rubbish X FactorArchive
- October 2011
- September 2011
- August 2011
- July 2011
- June 2011
- May 2011
- April 2011
- March 2011
- February 2011
- January 2011
- December 2010
- November 2010
- October 2010
- September 2010
- August 2010
- June 2010
- May 2010
- April 2010
- March 2010
- February 2010
- January 2010
- December 2009
- November 2009
- October 2009
- September 2009
- August 2009
- July 2009
- June 2009
- May 2009
- April 2009
- March 2009
- February 2009
- January 2009
- December 2008
