May 31, 2012 12:27:49 PM
Watches as a financial investment
During times of inflation and lack of financial growth investors look for new, secure ways to invest their money. In addition to gold, there is a further attractive investment option: not just enthusiasts and collectors but more and more investors are putting their money into watches.
The biography of a typical collector always begins with a passion for something. After that comes the selective investment. The same applies to high-priced watches. A large proportion of those who own watches in the luxury class began to invest many years ago. However, an increasing number of private investors who are interested in investing their money as securely as possible are now also buying valuable timepieces.
Investing in watches – what are the advantages?
In addition to the fact that the investor acquires objects which have not only a financial but also an aesthetic value, a large proportion of luxury watches can be converted into money again relatively quickly. If an investor has a Rolex or a Patek Philippe, for which there is strong demand, he can always get a very good price for it almost anywhere. This is why watches are so-called 'fungible' financial assets which can easily be converted. In contrast, precious stones and jewelry are not so easy to turn into liquid assets once more.
Appreciating in value – realism is required
In the case of watches it is important to stay realistic. Only around 20% of all luxury makes have the potential to appreciate in value. A certain amount of patience is required, because it can take up to 20 years for this appreciation in value to be realised. In the case of some watches the process moves faster: to mark the anniversary of his company a major German jeweller put a limited edition platinum wristwatch on the market. After only three years the price had doubled.
However, in contrast to all other non-financial investments watches have one great advantage: they are not subject to inflation. The fewer models of a particular manufacturer are on the market, the more of a rarity they become. At the same time watches, too, are subject to economic fluctuations and trends.
Which are the right watches to invest in?
To begin with a fundamental decision has to be taken on whether to invest in modern or vintage watches. Modern watches will only appreciate in value after a number of years, whereas in the case of vintage watches the process of appreciation has often already begun, in that the watches are 30 years or even older and accordingly have a certain collectors' value. Industry experts recommend investing in brands such as Rolex, Patek Philippe, A. Lange & Söhne or Audemars Piguet. Older models by Jaeger-LeCoultre, Breitling or Omega are also highly popular with collectors. Of course there is no stock exchange for trading in watches, as is the case with securities. It is always advisable to buy or sell watches through certified dealers, who operate for example on watchSea24.com, or via auction houses.