Boris Grozev's Blog

” The key to wealth is that it doesn’t matter. Once you’ve had it, you don’t think anything of it; you can wear cheap watches.” Nassim Taleb

Investing is ultimately the act of buying an asset with the hope that in the future it will appreciate in value and eventually produce a financial return. This is what it is from purely financial prospective. However, these days many of us are looking not only to produce financial benefits but to do that in a way that benefits the community, environment or even corresponds to one of our passions. Some of us like cars, others believe in real estate, third in distressed assets… You can have a look on the links to see how you can invest in these alternative form of investments. Ultimately, all these are different avenues leading to the a similar destination. For many reasons, watches also represent an excellent store of value. So lets see what makes a watch an investable piece?

So what makes a watch investable?

The brand and the model are something that matters more than most people imagine. Only few of the many luxury watches have an investment return potential. Usually, the brands that have the potential to appreciate in value are selective about their distribution channels. Their collectible pieces are hard to find. Rolex and Patek Philippe are typically the ones that have the potential to increase their value over time, according to Watchtime editor Robert-Jan Broer.

Limited Supply

Like with any investment, the smaller the supply, the bigger the value. For example in 1957 Omega produced only 300 Speedmaster, Seamaster and Railmaster watched. All highly regarded until this date. So if you can think about investing in watched, it is wise to consider buying a limited edition piece.

Watch History

The most valuable watches usually have an interesting story behind them. If their previous owner was famous politician, a sports star or a famous actor chances are they will be worth significantly more than an identical timepiece produced at the same time.

Serial Number

Even numbers or an interesting pattern in the watch serial number can potentially increase fractionally the watch value. Missing or grayed out numbers can however dramatically reduce the value of the watch. So make sure that the time piece you are thinking of investing in has a full and clearly readable serial number.

Packaging, presentation and condition

Original packaging, fine condition and stellar presentation are all having an impact on the resale value of your investment. Naturally, it is important to make sure all the presentation of the time piece you are interested in is impeccable.

Once we looked at what can make a time piece a form of investment, lets look how we can get exposure to the market.

Via an investment fund

As unusual as it seems, yes there are investment funds that specialise in watch investments. Of course there are few of them . However as an asset class these funds have produced spectacular returns – 176% according to a report published by Coutts. Among the names of funds that float around The Watch Fund, based out of Singapore seems to be the most established. On their website it says that they offer a guaranteed 10% yoy return. You can see more about their business model here. It is important to note that these funds are not regulated, so be aware and think what is the RISK you are willing to take before dicing to invest in them.

On your own

There are three ways you can invest in watches on by yourself via dealers, internet exchanges or auction houses. Doing that is also risky as there might be grey marker watches available on these venues, which might lead you to losing capital. Typical commissions for dealers and auction houses are 10-20% of the watch value.

Few final words

Now, that we have looked at what makes watches an attractive form of investment and how we can invest in them, it is worth writing down what are the characteristics of this investment form: it tends to be not liquid as some of your watches can take up to 18 months to be converted to cash, also there is a lot of care and maintenance so that you can keep your watch in good condition and servicing is not cheap, finally if you want to protect yourself against risk, insurance for expensive time pieces tends not to be cheap.

Time pieces allow us to invest in our passion. It is not an easy thing to do, however, it gives us the opportunity to get a bit of financial return as well as well as do something that we like. It is also hard to find good value investment watches, however for every day watches I tend to lean towards using www.timedix.com, which offers great value for money. Like, share, comment and of course tell me what you think.

About the Author:

Boris Grozev is a seasoned fintech executive. Entrepreneur by heart Boris has helped number of businesses to create and implement business development and product strategies. His advisory work in Emerging and Frontier markets has promoted culture and technology change, fostered innovation and lead to tangible results. He invests in variety of asset classes. Boris is a fast learner, whose leadership abilities, ambition, stamina, passion to succeed and attitude naturally spread to others helping to achieve common goals.