Do Luxury Watches Make a Sound Investment?
Tuesday - 18 June 2013
Luxury items can make excellent investments. Classic cars, wine, jewellery and art are all examples of non-typical yet potentially profitable speculations.
But what about wrist watches?
If you want to spend your money on a luxury item that will grow in value, is a timepiece a good choice? Possibly.
The best watches can gain value over time. But you'll only discover the watches that are likely to appreciate in value if you're willing to put time and effort into research.
Even then, there's no surefire way to ensure the watch you buy will give you returns on your investment. But that's part of the thrill of the chase.
Here are our top tips for choosing a timepiece to invest in.
Choose a watch you'll use and enjoy. First, because that way your investment will repay you with happiness, if not with money. Second, because if you hide your watch away in a bank vault, lack of use will make the lubricants inside harden, rendering it worthless. For your watch to have any chance of growing in value, you'll need to use it regularly.
Don't invest money you can't afford to lose. This is true of all investments, but is especially true with watches. If you're looking to put aside your life savings to create a nest-egg for the future, ask for tips from your financial advisor, or give your bank manager a call. Pick a watch that suits your budget.
Choose a timepiece with a story to tell. Models connected to films or celebrities tend to outperform the general market.
Scarcity is your friend. Scout out the limited editions. Look for the unique and unusual. Picking a timeless classic may seem like a good idea, but if there's an oversupply, which is often the case with classics, then you'll struggle to resell for a profit.
Be patient. Watches can appreciate in value fast. Between 2004 and 2008, a golden era for resale values, prices of vintage watches were seen rising by up to 10% within a single month. However, to see this kind of profit, you'll have to wait years or decades. The key word is vintage.
If all else fails, remember you've made an emotional investment. Even if your watch doesn't grow in monetary value as you'd hoped, remember there are more important values in life than financial profit. You can treasure your watch as a family heirloom. Keep it to pass on to your children or grandchildren.
Image credt: Money by Philip Taylor.