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Something weird happened in spring 2023, just at the pandemic’s start: the vintage-watch market boomed, while regular life came to a standstill. Soon, sales of new watches began to rise. This has been going on for years. Steel sports watches have replaced old-school fancy pieces as the objects of white-collar desire as dress requirements continue to ease, and auction houses appear to be setting sales records every week. Collecting watches has suddenly become more popular and difficult.
But then something weird happened: a completely new way of thinking about collecting arose. One that values adaptability and the capacity to enter and exit a famously growing industry. One that prioritizes personal preference above group consensus. And one that appears to be more of an art than a box-ticking, cheque-writing science.
Why should you buy a high-end watch?
Watches are often purchased for three reasons:
Increase in worth. Luxury watches have the potential to rise in price for a variety of reasons, with many reasons why these investment watches can increase in value.Increased diversification. Real assets may serve as a solid inflation hedge as well as a means to diversify your investment portfolio.Devotion. The purpose of an investment is to produce money, but if you like timepieces, it may be more fun to invest in (and wear) a watch than, say, a mutual fund.
How to Invest in High-End Watches
Purchasing watches directly
The most apparent approach to investing in timepieces is simply purchasing one from an authorized dealer, an auction website, or a marketplace. The benefits include complete power and choice over which watch to purchase, the option to shop about and compare pricing, and the ability to wear the watch. In comparison to some of the other choices, we’ll examine below, the negatives are that a greater degree of understanding is necessary, you’ll need to consider storage and insurance, and depending on where you buy from, you may need to be cautious about authentication.
Purchasing stocks in watch companies
Many luxury watch brands remain in private hands, including Rolex, which is held entirely by the Hans Wilsdorf Foundation, a private family trust; Patek Philippe, which is owned entirely by The Swiss Stern family; and Audemars Piguet, which has been family-owned since its inception.
The major alternative way to gain exposure through the stock market is to purchase stocks in watch companies. Watches of Switzerland, a luxury watch retailer listed on the London Stock Exchange, is the most relevant example. Its share price has increased by more than 160 percent in the last year. Chronext likewise announced plans to go public but has postponed its first public offering.
Investing in Mutual Funds
You may be wondering if there are any funds in which you can invest to gain exposure to watches. In a nutshell, such funds are not generally available. In the market, we occasionally see a group of affluent collectors organize their own private “funds,” either legal or informal, where they pool money to acquire watches. Due to regulatory constraints in most countries, there are no exchange-traded watch funds or funds similar to what exists in real estate with REITs, allowing any ordinary investor to readily participate in alternative assets.
Investing in the High-Demand Watch Market
The watch market is in high demand and presents an opportunity for potential investors. A potential investor can make a great return on their investment with the right strategies in place. Investing in the watch market can involve buying stocks, investing in specific watches, or a combination of both. Here are some tips for potential investors on how to invest in the high-demand watch market.
Research the Market
Before investing, potential investors should research the watch market. They should identify what watches have the highest demand, where to purchase them, and the average cost. Research should also include any online watch selling websites and the trends in the industry. Staying up-to-date on the latest watch trends and news can be helpful for potential investors who want to make sound investments.
Make Wise Investments
Another key point when investing in the watch market is to purchase high-quality watches. Purchasing luxury watches with good resale value can be beneficial, as these watches typically preserve or increase their value over time. Potention investors should research any watches they are considering and evaluate their condition before making a purchase.
Create an Investment Strategy
Potential investors should create an investment strategy before investing in the watch market. This includes setting a budget, evaluating the risk involved, and determining a timeline. Additionally, setting short and long term goals helps potential investors to understand the overall strategy of the investment and determine when it is the right time to cash out.
Frequently Asked Questions
- Can I invest in the watch market? Yes, the watch market is an excellent investment opportunity. Potential investors should research the market and create an investment plan.
- Which watches are the most valuable? The value of a watch depends on the quality, brand, and condition. Luxury watches with good resale value typically preserve or increase their value over time.
- How do I determine the value of a watch? Research is key when evaluating a watch for its value. Potential investors should research the watch, its condition, and the current trends in the market before making a purchase.
Summary
The watch market is in high demand and presents potential investors with an opportunity to make an excellent return on their investment. Before investing, potential investors should research the watch market, purchase watches of high quality and value, and create an investment strategy. By utilizing the right strategy and making wise investments, potential investors can maximize their success in the watch market.