Investing in a watch: Is it doable?
I'm already a working girl and have a savings of my own. For my age, I know that I need to invest on something beside from stocks.
And now, I'm thinking to buy an expensive watches such Rolex etc. My question, is it a good idea?
Long time watch collector here so here is my view on investing in watches. In general, like any pieces of jewelry, prices of most watches, especially lower-end ones would depreciate greatly as soon as it is bought. I would not recommend buying a new gold date-just and try to flip the thing for a profit. On the bright side, if you sell the watch at unworn condition years from now, it probably would fetch a nice price.
In the vintage watch world, there are many life long collector that would be able to determine the value of different models based on rarity, age, condition and the story behind the piece. Consult https://www.hodinkee.com/articles/phillips-styled-auction-highlights</a">this for an example of what make the watches collecting world go round.
Look for great example of desirable models and negotiate a good price. I would recommend starting with vintage Omega, Rolex and Patek Philippe. https://www.hodinkee.com/</a">Hodinkee would be a great website to get educated.
Buy an expensive watch because you want one and because you can. Don't buy a watch as an investment. Yes, expensive watches tend to hold their value well, but come on...
Absolutely don't buy expensive watches as an investment. Buy only if you love watches & can afford it as something well within your means (ex. 200k comp, buying an 8k IWC). I say this as someone who intrinsically LOVES watches, and has tossed around the idea of keeping watches as a investment once upon a time.
At the end of the day, watches are an unproductive asset. Very speculative outside a few core brands (Rolex / Jaegar / Patek). Even then, if you choose to buy these, your ROI will almost certainly be better over a decade or two if you have bought into the S&P.
You really don't need to diversify much outside of stocks if you're in your 20s, but if you have considerable assets & really feel like you need to de-risk, I would look into real estate, and bonds, in that order.
What's the expected IRR and exit multiple?
I agree. Buy a watch because you want one and you can, but don't buy a watch that depreciates in value. I bought an old rolex 4 years ago, i know i can sell it for more today. It is definitely not a good way to 'invest' money, but I think i get your point in that some watches can hold their value or appreciate while others do neither.
If you'd investing in the S&P 4 years ago, you'd be up 40%. Is your ROI greater than that?
I feel if you have to think about investing in an expensive watch, it's probably a bad idea
Most inexpensive watches can't be called investments (mostly anything under 10k, maybe more) because they are highly speculative. Not to mention illiquid outside of a few core brands. This leaves you with the really expensive stuff that the market knows well.
But in a market like today where everyone is starved for yield, watch values have already been largely inflated. It's another bubble waiting to burst imo.
When you talk about investment grade pieces, there's 3 main things to consider: 1. Provenance is probably the most influential factor in investment grade pieces. There's very few watches of these in existence, ie Paul Newman Daytona. 2. The second factor in pieces that do tend to gain in value are ones that are/were limited in production, ie 1,5,100 run editions (modern and vintage) by notable brands.
3. Third is condition. This affects the first two factors above, but it also drives the value of more common pieces that are still considered highly desirable, ie most Daytonas or even Nautiluses.
This is all to say that unless some of the above are met, it's generally not a good idea to buy a watch as an investment. If you have dry powder, this ain't it chief.
While there are certainly watches that will hold their value, its really one of the above that WOULD HAVE made you money. I say this because I think the watch investment ship has sailed imo. For the most part, these factors are already priced in given how the market has grown. Tons of people have moved into watches as alternative investments because they can't find the returns in traditional markets.
Tldr; No, dont buy a watch as an investment and just buy the stuff you love. Oh and never finance a watch please.
That's a pretty speculative move if you are actually trying to 'invest' and generate a higher return... unless you are a total pro in the watch industry, you really don't know what your are doing or are well informed enough to even speculate what may hold its value the best. Its not even as simple as selecting a model within a brand. There are so many other things that can affect value. If you want a nice watch then just get one.
Agreed. The guys who buy for investment are either advised by experts or are experts themselves buying for resale or auction. But these experts are also the ones that are, imo, making that same market because their word is often gospel.
"A working girl"
So many better ways of saying this...
Looks like theaccountingmajor is back haha...OPs post sounds just like TAM Buying a watch as an investment is definitely a TAM move
Dude I don't need a watch when I control time lmao
if you are looking to invest for the long term, jewelry is a horrible idea. However, a basket of stocks that pay high dividends (REITS, shipping, oil) will do you much better.
Do some research and find 10 or so companies that you would want to own for the long term. Then, wait for the next 5-10% market correction, and then buy your list of stocks. You will get much better returns than buying jewelry.
Diamonds, for example, are worthless. DeBeers has thosands of tons of the stones in their mines, and then release just a little bit every few months. The only reason diamond prices are as high as they are (16k for a nice 2 carot stone) is because DeBeers controls the supply, and their slick marketing campaign that everybody buys into thinks that a diamond is rare (its not). If you try sell that 16k 2 carot stone in 4 years, you'll get less than you paid today...because the diamond dealers all know the stones are worthless. The only buyer is people like YOU.
However, a company that pays 5-8% dividends every year....that is gonna be a great investment for many years to come. Just wait for the S&P 500 to dip 5-10% in the near future and then go on a shopping spree and buy these companies when they are on sale.
Buying a Rolex is a total pleb move--- Richard Mille, AP, Hublot, Patek Phillipe level or GTFO And honestly anything else will likely depreciate anyways
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