What are the advantages in investing in luxury watches? - Seedly

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Asked on 24 Apr 2019

What are the advantages in investing in luxury watches?

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Junus Eu
Junus Eu
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Top Contributor (Aug)

Level 8. Wizard
Answered on 24 Apr 2019

Only if you pick the right pieces.

Additionally, you will be looking out not just for authenticity and craftsmenship, but also demand. Ultimately, if you are looking for watches as an investment, you would be looking for a coveted item that can command high prices from buyers later in the future.

Advantages:

  1. #HIGHSESlife - but seriously though, some people do feel compelled to dress the part especially when doing business. If I wore a watch though, I would just wear one that serves its function, and not wear my investment pieces out.
  1. Family heirloom. Remember the iconic Patek Philippe slogan: 'You never actually own a Patek Philippe. You merely look after it for the next generation.' A Patek watch does not merely tell time. It’s an heirloom that transfers values across generations.” Ah, the allure of marketing like that.
  1. Diversifying your portfolio. It is important that you conside the demand of it though. So it's important that it's piece that you will enjoy, even if the demand for it goes down.

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If you are able to keep the watches in a pristine manner and watch out for supply, demand, trend and craftsmanship then yes, the price of the luxury watches you have will help diversify your investment portfolio.

Supply: Limited pieces are highly sought after; certain collaboration between famous and reclusive artists even more so.

Demand: Linked with supply, but generally knowing the likes of the collectors helps identifying what models are worth keeping long term for value appreciation.

Trend: Watches comes with different design face, functionality, materials and for some even the way it is put together is an art. Know what are the kinds that appreciate the value by being the more outstanding and everlasting ones.

Craftsmanship: craftsmanship is an dying art and one that people do appreciate paying more for it. Look for one that is unique.

To take note though, certain watches are susceptible to dust and on top of that SG has high humidity. Hence if investing in watches do watch out. Also, being physical commodity take note to keep it somewhere safe.

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Sandra Teo
Sandra Teo
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Top Contributor (Apr)

Level 6. Master
Answered on 24 Apr 2019

Hi there! Watches are a good investment but like investing in alternative investments such as cars, wine, art or any other tangible asset, it takes real expertise to make a profit. The secret to successful investment in watches is knowing which watches can be acquired below the retail prices, increasing their capital gains from reselling the watch.

One advantage of investing in watches is their low correlation to other financial markets, such as stocks and bonds. A stock market crash would not directly impact the value of your watch and their value will hold.

In investing in watches you would want to consider several aspects that play an important role. This includes brand recognition, heritage, exclusivity, availability and most importantly the appreciation of the watch's value over time. While Rolex is one of the brands highly demanded, has a wonderful heritage and high level of recognition, it is widely available. Comparably, Patek Philippe is more or less similar to Rolex except for its accessibility due to their higher price tags compared to Rolexes. Other brands with a high demand include breitling, Omega, Audemars Piguet, Cartier, Panerai, Jaeger-LeCoultre and IWC. Apart from the brand, watches that tend to appreciate over time are the all-time classic (or also known as "iconic" watches).

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Zann Chua
Zann Chua
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Top Contributor (Mar)

Level 6. Master
Answered on 24 Apr 2019

Hello!

One advantage of investing in a luxury watch would be that it can be a way for you to diversify your portfolio. Having a diversified portfolio is important when it comes to investing. Besides diversifying in terms of bonds and stocks etc, watches can be another form of diversification method.

Another advantage would be that you will be able to personally own it! If you are someone that likes to see the physical thing that you are investing in, then luxury watches would allow you to do just that.

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