Asset picks: Watches

Alternative assets find their way to more and more investors worldwide as the search for above market returns, low correlation and reduced risk make way for such investments. Investing in watches is not only a good way to bring abnormal returns over the years, but also tangible assets that can be worn and enjoyed by the owner. Luxury watches and some grand complication are masterpieces of mechanical art. On this level, watch investing converts into art collecting. There is something special about an intricate mechanical piece that measures time. Time, the most precious commodity we all have equal amounts of each day. Time, that is highly appreciated and valued by investors as the ultimate test of resilience and fortitude. As assets appreciate or depreciate over time, investors and collectors alike can find great solace in measuring it and keeping a note of it at all times on their wrists. Every watch tells a story and is bought to commemorate events or pass down generations. Not every watch is high quality which lasts more than a generation or is worth keeping. This is where certain brands and collectible watches come forward. Some of the most collectible watches currently on the market are almost all by Swiss brands, with a few German and one outstanding Japanese. Below are some of the top collectible brands with potential for great returns:

  • Rolex – Submariner, Daytona, GMT and Explorer – has a very high demand, long heritage and it’s vouched for by a number of celebrities and VIPs. A Rolex also set itself apart in the eye of the general public as a status and cultural symbol.
  • Patek Phillipe – Aquanuat and Nautilus models – accessibility to Patek’s due to their limited productions and higher prices make them and outstanding long term investment and a beauty of design to contemplate.
  • Audemars Piguet – Royal Oak – is an exclusive and expensive time piece that has seen an increased interest and value appreciation in recent years.
  • Grand Seiko – Japanese started fine watch making in the 1800s with Grand Seiko. The quality and craftsmanship for theirs price is outstanding. A fascinating feature of the Grand Seiko is it’s unique movement.

A special note has to be taken into consideration for the brands above that only some models and reference points are a good investment.

If you are just starting on your watch collecting journey a great entry level investment watch with long term value that as appreciated over the years is the Rolex Submariner. It is almost sure that you can’t go wrong with it based on decades of price data. Best value when you buy one you buy deep heritage.

There are many other exceptional brands with turbuillon movement and limited edition grand complications from brands such as F.P. Journe, Jaguer le Coultore, Omega, Cartier and A. Langhe and Sonne. There are certain brands that are currently losing value such as Graham and Panerai while in other cases a particular model that has been oversupplied or new similar model have reduced it’s value. Some time pieces have left their mark in world history, like the Omega Speed master which went on the Apollo 11 mission to the moon on the wrist of the astronauts and the Rolex Explorer which was on the wrist of the Mountaineers who first climbed Everest.

Rarity, complexity and condition are factors that define the value in the watch investment. To determine a good investment from a bad one, one must learn to value those among other factors. A skill not easily acquired for such a niche investment class. Aspects such as brand recognition, heritage, exclusivity, availability, and – perhaps the most influential of all – demand are important when it comes to the development of a watch’s value over time. Only about 20% of luxury watch models are eligible for an investment.

For decades, watches have been symbols of luxury, wealth and personal taste. An appreciation of the craftsmanship and the complicated parts that constitute this piece of mechanical art can bring great pleasure to its owner. Owners such as the Dalai Lama and the Pope Francis which are also avid watch enthusiasts. There is something special and elegant of having a piece of art on your wrist that is powered by your motion and it measures each second of your life going forward. Investing in the right vintage watch is a good bet for troubled financial times. Watch collecting is a journey not a destination. For the smart investor it can not only bring high returns, but also offer an experience like no other measured in time, second by second.

Disclaimer: Opinions are my own and not the views of my employer. The Content is for informational purposes only, you should not construe any such information or other material as legal, tax, investment, financial, or other advice.

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