Investing in Watches

Investing in Watches

Investing in jewellery, especially watches, requires market savvy. Typically, even fine wristwatches lose 20-60% of their value over time. Most individuals sell their watches at a loss – having enjoyed them over the years.

If you are investing in watches with the intention of selling later, you need to gauge what you stand to lose, not get back Evaluate the choices – don’t rely on ‘better resale’ statements. See example below:

$3000 new, resell for $2400 (80%), net loss $600

             $1500 new, resell for $900 (60%), net loss $600

Watches are generally poor choices as investments. Buy a watch you will enjoy.If you are buying with the intention to sell, here are some tips that may help you make an informed purchase. Used watch buyers seek greater value in their purchase

Favorable aspects

  • The resale market values premium features minus the inflated values associated with new watches
  • Used watch buyers seek specific models, brands, and movement calibrates f
  • Favorable reviews of a particular model will impact the demand on the used market
  • Resale values depend heavily on the buyer’s perspective of what is good or bad and their willingness to pay
  • Supply and demand plays a large role in the price a buyer is willing to pay
  • Numbered, limited editions, commemorative pieces, etc. retain a good resale value
  • Transferable, active warranties are a good selling point
  • Noteworthy pieces worn by famous or notable personalities command exceptional prices

Less favorable aspects

  • Mechanical vs. quartz versions of the same watch- at resale, the mechanical versions typically deliver a premium price
  • Boxes and papers do not add much to the selling price unless the watch is close to new.
  • Unusual serial numbers– add a novelty interest to the watch, the influence on resale value is usually trivial.
  • Diamonds, gold, platinum or other premium metalsResale values better reflect the market value—disregarding premiums of new

Investing in Watches – Undesirable aspects

  • Removal of serial numbers– unacceptable
  • Customized watches—inscriptions and personalization reduce the saleability
  • Poor durability or heavy retail discounts

Investing in Watches – Classic Watches

Watches are typically not good financial investment—except for those dealing with very high-demand models. If cared for, investing in a quality watch and maintaining it will preserve enough value making their cost of ownership very affordable, and potentially less than lower priced models. Here is a perfect scenario:

An Omega Speed Master Professional bought in 1969 for $300 which today sells in good condition for a minimum of $1000. Based on the Consumer Price Index in the USA, $300 in 1969 translates to about 4.7 times as many dollars in 2000. So spending $300 on a watch back then is equal to buying a $1400 watch today. If that watch is now worth at least $1000, then it has retained over 70% of its real value. In “real” terms, that watch has only cost 400 modern dollars (plus maintenance) for 31 years of enjoyment. Quite respectable – however, it did not triple in value as it initially appeared.

 

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