Investing in watches: It is time to make some money
In an age where people have their smartphones perpetually glued to their hands, having a plain ol' watch seems pretty pointless – who needs a timepiece when your wearables can tell you the time, your schedule, who is calling, how many calories you've burnt for the day and even your heartrate.
And yet, timepieces, horologes, chronometers, metronomes, i.e. the good old-fashioned watch, has a special allure that has withstood the test of time.
That watches are still big business these days defies logic because, let’s face it, the primary function of the watch – to tell the time – has been rendered pretty much obsolete by iPhones, Galaxies and the like. So why are people, especially men, still buying them? Why are the pages of men's magazines such as Esquire and GQ stuffed full with glossy adverts of celebrities wearing watches that cost more than I make in a year?
The short answer is love. It’s like having a piece of history, tradition and craftsmanship sitting on your wrist. And those who collecting these mini-masterpieces generally don’t value them as tools for telling time but rather as works of art.
The Value of a Watch
So what does it take to become a successful investor of watches? It certainly isn’t easy and can be rather time-consuming. Here are the basics you need to know to about investing on timepieces.
New watches fresh off the production line depreciate in value the same way cars do. The good thing about it though, is that once a watch goes through its initial depreciation, the next round will be a much smaller hit (if ever).
Aim to buy a watch that can hold its value over time.
Here are two perfect examples. The first ever waterproof watch, the Oyster, was made by Rolex in 1926. Breitling, on the other hand, launched the world’s first stop watches in 1930.
Also, contrary to popular belief, Apple wasn’t the first to introduce smartwatches. In fact, the first smartwatch was issued by Pulsar of Seiko in 1982. The NL CO1 was capable of storing only 24 digits of information, but it served as a breakthrough towards a new form of watch technology in the 1980s.
Watches like these are highly sought after by collectors. The historical significance has boosted their premiums.
There are three main categories in grading a watch for its investment value.
Original. A new watch is one that’s hardly been used. All of its parts are original, with not even the slightest hint of wear or scratches.
Excellent. Once again, all the original parts are in, but there might be minute scratches or signs of use.
Good. Most hobbyists and collectors wouldn’t recommend a watch that’s said to be in good condition. What this translates to is, this is a watch that’s been bruised but still runs well. However, if said watch is something like U.S. President Obama’s Jorg Gray 6500 Chronometer which he wore at his first victory speech in Chicago and Inauguration Day, that’s a whole different ball game.
How do you verify if a watch is new, excellent or just good? Get a formal appraisal done. In this process, even its internal components are checked. You don’t want to accidentally end up buying a Rolex that’s been stripped down and replaced with generic guts now, do you?
Making Your Buck
A watch investor makes his money by hunting down and buying undervalued watches. These are great watches that are obtained below the market price. It does take a good deal of research. It’s all a matter of buying at the right place and at the right time.
How does one track down a watch worthy of an investment? Auction houses are a good place to start, as the houses clear watches that are sourced through private collections at certain seasons. Some of these watches are antiques and are prime game for watch collectors and investors alike. Two noteworthy auction houses to check out in Singapore are GPJW Auctions and Sotheby’s.
Garage sales are also a good idea to check out. Some people don’t know that Grandpa’s dusty watch is actually treasure cache. Buying a new watch doesn’t necessarily mean you make money with it. Scouring around for a used one might work better for you instead.
Knowing Your Buyer
There’s been an increase in demand for watches, and this covers the low, medium and even higher end of the watch market here. Luxury and high-end watches are actively sold as Singaporeans have become more interested in horology.
Another worthy point to note is that tourists also aim to buy luxury watches while they visit Singapore.
Going for the Big Fish or the Small Fish
As an initial watch investor, you don’t have to dive all the way and get Patek Philippes or Rolexes. Go for a Breitling, TAG Heuer or IWC. This way, you’d be able to get the feel of the game. And if at some point, you feel it’s not your game, you can stop wasting your time and get out.
How to Sell
You could sell your watch at an auction house. However, commissions charged come to almost a quarter of the price. As a first time watch investor, chances are that you might scrape through a profit after a sale, but that’s slim. eBay is a good option though most seasoned buyers there want to deal with an experienced seller.
A good alternative – work with a watch store. If they buy the piece off of you, the price might not be in your favor. You’re better off negotiating for a consignment placement. Get in touch with key watch sellers in Singapore like the Heirloom Gallery and Passions Watch Exchange.
The last way to sell? Go old-style and place an ad in the papers.
Until you’re able to sell your watch off for a profit, you’ll need to keep aside some funds. Replacing parts on your luxury watch can set you back by up to S$20,000 a pop.
If a year or two goes by and the watch is still in your watch box, its value will go down. That is, unless it’s a rare vintage timepiece that can be worn even after a decade or two
You could look at your watch investment timeline from this perspective – Investing in watches will take up your time, expertise, and even patience, but it can be rewarding and fulfilling too.