Luxury watches as investment tools
Modern man has an inclination of evaluating everything expensive in terms of investment. So is the case with luxury watches. History has seen some exclusive, super expensive, pre owned luxury watches being sold in auctions for prices way higher than for what they were originally bought. In recent decades, rising passion for luxury watches and resultant spree of vintage watches collection by bourgeoisies has raised the prices of classic watches by high-end brands like Patek Phillippe and Rolex. It has certainly opened the chapter of luxury watches as investment tools. However, many question marks loom around whether watches can be treated as real assets that can be liquidated yielding ripe fruits or not.
Some investments like real estate are considered safe and promising – though certain risk factors are always there. Others appear like volcanoes and die like bubbles whereby giving some investors fruits for the generations to come while robbing others of their base value. For good or bad, more non-conventional investment options are volatile and need careful estimates and insights before a plunge is to be made.
Investment in luxury watches is not a new business, however, it’s a new fad where many affluent people, particularly youngsters are keen to jump on the bandwagon and try their luck. There have been some remarkable success cases in the arena as well whereby some classic models by top-notch brands have been readily received by watch lovers and the original owners received a bounty against their ‘asset’. However, will this trend survive the coming decades? Will pre owned luxury watches continue to charm watch geeks like antiques and classics? Will some state of the art invention in the coming decades make classic watches redundant and worthless? Can every luxury watch owner eat his cake and have it too by enjoying his watch for decades and then selling it for profit? The answers to these questions are just there in the guess books. Today’s reality is that the market for luxury watches is hot and those who can afford it are keen on grabbing their share of the pie.
Things to consider before investing in luxury watches:
It is difficult to resist the urge of trying your luck with something that some of your contemporaries are benefitting from. However, a proper homework is what makes the difference in most cases between the benefitting ones and the losing ones. Here are some of the aspects that you must consider before spending a fortune on a vintage luxury watch.
Affordability:
As clichéd as it sounds, affordability is the first consideration before thinking of stepping a foot in one of the world’s most expensive market. Though it is an obvious factor, the underlying concept behind affordability is that the money you intend to invest is not your bread and butter. If you have to sell the house you are living in for investing in a classic Rolex or a vintage Patek Phillipe, technically you cannot afford the investment.
Give time to ripe:
Principally, the idea of ‘investment’ is buying unripe fruit and letting it ripe over time before selling it in the fruits market. Luxury watches take a little longer to ripe. If you are spending some twenty thousand dollars on a classic watch today, you cannot expect the figure to rise considerably two years down the road. You’d rather have more profit form a fixed deposit in a bank over that amount. In order to enjoy true benefits of such an investment, you need to give it time to mature properly. Some of the vintage watches that were sold for double or triple the amount of their basic price had to wait for decades to get the buyers who had an eye for them and were willing to pay hefty sums for adding another gemstone in their precious collection.
Immense knowledge of watches and their market value:
Market of pre owned luxury watches is not a uniform and predictable one. It requires a lot of research and consistently upgraded knowledge of the watch market to invest successfully. One has to keep an alert eye on the rising and lowering prices, market trends, buyers’ preferences and many such aspects in order to mint money from a highly volatile market. Also, one needs to keep in account that some watch features sell better than others and some brands have more resale value than others. If one can access a vintage timepiece that has an important historical reference – worn by some legendary star or celebrity or belong to an era of world wars or other important events – that would add a great value to the watch’s worth, for many people are interested in things that have some commemorative value.
One also needs to keep in mind that the market of vintage luxury watches is not an organized one like the stock market. There are not frequent exhibitions or fares where one can get walk in customers willing to spend thousands of dollars. Rather, it’s an exclusive market with rare and very limited buyers scattered throughout the world. One has to have some specialized channels to access prospective buyers.
Nerve to gamble:
Finally, a nerve to gamble is one very important aspect of any investment. All long term investments pose some degree of risk and one has to be somewhat prepared to face both profits and losses. Though there are experts out there who predict trends of rise and fall in the markets, the market can react in a totally unpredictable manner and things can go awry. Not every planted seed turns out to be a tree; nonetheless, people don’t stop planting trees. They say, ships are safest at the docks but that’s not what ships are for. You have to go in deep waters to test your potential since playing totally safe yields mediocre results. Luxury watches have long been a delicacy among men of class and they will continue to do so for several years to come. If you have the capacity to buy a classic timepiece, there is no harm in hoping for some good returns in the years to come.
