CNBC: A timeless investment choice

I came across this interesting article on CNBC’s website which talks about watches as an alternative investment, more interestingly, as an asset class that withstands the test of time. Personally I find it satisfying that my little hobby (my wife would call it an obsession) can now be described more respectfully as an alternative form of investing. Hopefully with the aid of this article I can argue my case more eloquently and convincingly in justifying my next watch purchase to my better half.

Some points from the article which I found to be worth noting:

i) The article that the current downturn has been hard on the luxury watch market. However it is necessary to differentiate between “retail” luxury watches from “collectible” luxury watches. In the current global economic malaise the collectible luxury watch market have been more resilient. Record prices are still seen at recent horology auctions for rare timepieces.

ii) “Jon Cox from Kepler Capital Markets says collectible watches may also offer inflation protection as investors may be worried of higher price levels in the future. He adds that in some countries, a Rolex is even considered a currency.” – That’s good news for all Rolex fans out there. Like they say, never leave home without your trusty old Rolex. You never know when you run out of hard cash. With a Rolex or two on your wrist, you can confidently pop into the nearest neighbourhood pawn shop and walk out five minutes later with wads of hard currency bulging in your pockets.

iii) “While age for most other asset classes is associated with depreciation and loss of value, a collectible watch investment ticks differently. The older a timepiece is, the more value it usually holds.” Words of wisdom indeed. Like I always say, it’s far better to put your money into good watches than to buy an expensive luxury car which depreciates the moment you sign the purchase agreement. But I’ll bet there are people out there with deep enough pockets who would dispute my line of thinking.

iv) “Signs of wear and tear show a watch is authentic and has history, while a polishing only reduces a watches’ value.” So all you weekend watch polishers please take note. You may be polishing off your watch value, so go lightly on the cape cod cloth.

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