Is A Watch An Asset? Why You Should Consider Investing In A Luxury

Is A Watch An Asset? Why You Should Consider Investing In A Luxury Asset

 

Timepiece This brings us to the question: is a watch an asset? Unlike cars and real estate, watches appreciate in value over time.

While you may lose some money if you decide to sell your car or home soon after purchase, a quality watch will only become more valuable as the years go by. In fact, many people consider high-end watches to be a wise investment.

Luxury timepieces are often crafted from precious metals and stones, which means they retain their value even when the economy is struggling. In addition, watches are much smaller and easier to store than other types of assets such as cars or houses. This makes them ideal for people who want to invest their money but don’t have a lot of space to do so.

Of course, not all watches appreciate value at the same rate. The most expensive and sought-after watches usually come from high-end brands such as Rolex, Cartier, and Patek Philippe. These brands have built up a reputation for making quality timepieces that hold their value over time.

 

Is Watch An Assets

Unless one buys the watch purely with the intent to sell, a watch is not considered to be good. For someone who purchases watches with the intention of flipping them, the watch may be seen as an asset.

Since most people are not buying watches with the intention of flipping them later, a watch would not be an asset to most people. Now, for those people, a watch is likely an asset, at least in their eyes. Now that we know the reasons for or against why a watch might count as an asset, let us dig into it a bit deeper, and look at exactly why, for the majority of people, a watch would not count as an asset.

 

What watch are assets?

With this being said, it is safe to say that the cheap watch brands are not making watches that could be considered to be assets. More expensive brands like Omega, Rolex, or IWC, actually create watches that can be considered an asset. Some watches can be extremely expensive, and many high-priced items are usually associated with assets. Physical assets, such as luxury watches and sneakers, can be bought and sold at a profit.

For individuals who enjoy having quick access to their assets, luxury watches are an amazing investment opportunity. The financial-minded are usually worried about the investment value of buying a luxury watch. Unless watches are a market that you understand completely or have an established expert who can provide guidance on them (ahem, not your dealer), you might think a bit too hard about whether or not you are buying luxury watches for appreciation.

 

What watch I should invest in?

While it is true that most watches depreciate in value over time, a few luxury watches will grow and are considered to be among the best assets in terms of investment. Some brands, such as Rolex and Patek Phillipe, historically do really well and have seen their watch values steadily increase over the years.

Also, some watches will be good investments if purchased brand new, whereas others are better bought lightly used, but we cover this more extensively below. Are New or Used Watches Better Investments? While nearly all watches are generally depreciating assets, a few luxuries, high-end watches, such as Rolex and Patek Philippe, hold their value. Overall, a stainless steel sports watch by Rolex or Patek Phillipe is about the most certain of investments that one could make given the inherent uncertainty present in the market for watches.

Buying the wrong Rolex at the wrong time could still result in a watch becoming an investment with a negative return. Keeping those things in mind while investing in the watch is the best option, and it could make sure that the watch does not turn into a depreciating asset.

Now that we know that watches are typically depreciating assets, we want to explain more about why that is so, as well as how you can invest in a watch so it becomes an appreciating asset. Yes, watches appreciate in value over time, but this does not necessarily make them an asset. Not only does the market nature facilitate transportation, but a watch in its own right will also increase in value over time by 10-100 times what interest on a regular bank account would produce. The maintenance makes Rolex also appreciate Rolex market value, making their watches an appreciating asset over time.

Because these types of watches can and will increase in value, they will be seen by many people as assets. While certain watches may be able to be a valuable investment, always exercise caution when buying watches, where to purchase the watch, which models, and research.

 

How to get a watch as an asset

We already explained you will usually need to put down a significant amount of cash before a watch truly becomes an appreciating asset. Next time you are looking to buy a watch, make sure to think about how much money you might lose when walking out of the store. In a similar fashion, if you are going to purchase a watch that you will wear daily (or often), then this watch cannot truly be an investment, as often worn watches will be damaged, need servicing much more often, and will depreciate both physically and incur higher running costs.

Given extremely high operating costs, if you are holding onto a watch for less than a 10-year term, this investment asset is not going to be working for you. Unlike with many stocks and bonds, investment returns from watches are realized only when the watch is sold. If one could later sell a watch at a higher value, then considering it as an asset would not be wrong. It does not matter that if you own a $10,000 watch, there is nobody you would sell the $10 one to. It is not a good product unless at least its value holds, it is not a great one if it’s not getting appreciated.

An asset puts money in your pocket, and that, in the case of the wristwatch, happens when you sell it. Appreciation means that you are essentially stockpiling your bankroll, paying it off every time you want to cash in or swap in another watch. If you are buying a watch for a major event, and would never think of selling it, then this specific watch cannot really be considered an investment.

When you are talking about a watchmaker such as Rolex, the reason why demand is so low for Rolex is not that their watches are stuck on a boat somewhere out at sea. In fact, they have recently raised their watch retail prices in order to capitalize on a spike in demand. To cap things off, Rolex announced that Rolex has no plans to alter the number of watches that they produce every year. One day, we may wake up in a world where Rolex is making a lot of watches, or nobody will even love the brand anymore.

As is the case with other alternative assets like cars and artwork, luxury watches can be appreciated over time, depending on aspects such as brand recognition, legacy, exclusivity, and desirability.

 

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