In recent years there has been a strong growth in physical asset investing, for instance the pre-owned luxury watch market is anticipated to reach $30 billion by 2025. This is driven by a number of factors, including a booming millennial market driven by social media, strict production limitations among the largest timepiece producers and economic uncertainty. But how do you get involved in this fast paced market?
The first step is to procure the timepieces you wish to add to your watch investing portfolio, but be careful as not all luxury watches make good investments. Do your own research on the market, or work alongside a physical assets broker to best understand which watches have the best investing potential. Generally the top brands are Patek Philippe, Audemars Piguet, Richard Mille and Rolex, but even then not every model is equal in the secondary markets so having the right expertise is vital.
Due to demand vastly outstripping supply for investment-grade watches the trickiest step is obtaining them, obviously you could be lucky and have inherited one, although not many are in that position! For everyone else, you cannot just walk into a shop and purchase an investment watch since there are extremely long waiting lists and many operate on membership policies.
Otherwise there are watch dealers who rarely bring on board new clients unless they wish to open a significant account. All of these factors lead to watch investing being difficult for ordinary people to enter, which is where luxury asset brokers step in, since they already have the necessary contacts to get someone started at a lower entry point.
Now that you have your investment watches, you’ll need to think about storage. We highly recommend storing the watch within a secure bank deposit box, however, for many the value of investment timepieces is that they can be enjoyed. Thus is it of the utmost importance that they are secured within a safe or other secure place within your home.
Finally comes your exit strategy and this is where once again the market becomes more complex. There have been numerous high profile cases of well made fakes duping investors, this makes auction houses unlikely to work with small-scale unheard of investors and online platforms such as eBay rarely deliver favourable returns. There are many dedicated online marketplaces, although nearly all of them are in their infancy which means that it can be risky. This is where brokerages can step in to help, their wide range of contacts within auctions and official dealership channels increases the likelihood of greater returns.
If you are interested in investing in luxury watches, make an inquiry using the form below.