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I thought here's a little something to share with you. It's especially useful for the newbies. It was lifted from the watch mag 'TimeWerke':
When it comes to the pricier time pieces, perhaps one of the biggest mistakes most consumers make is have the misconception that they are actually 'investing' in a timepiece rather than spending money on it. Whether you can actually gain from a purchase of a timepiece depends on many factors, among which are the exclusivity(how rare is the watch?), condition(is it well-kept and in pristine condition?) and international recognition(is it a well-recognised brand worldwide?) of the watch.
Some examples would be the Patek Philippe references 5070 and 5980 and the A. Lange & Sohne Double Split. While these are fine examples of highly 'collectible' and 'investment-grade' timepieces, you must take not that not every watch is an 'investment' in itself.
Unless you are a well-informed collector or have privileged access to some of the most sought-after pieces, the best advice for most others is to spend your hard-earned money on a timepiece because you enjoy it. Should you enjoy a gain in future, treat it as a bonus. Bear in mind that the word 'spend' is defined as to "use up" or "exhaust" your financial resources(source: Oxford English Dictionary) as opposed to 'invest'.
Invest, on the other hand, is to place your financial resources into a scheme or product with the "expectation of achieving a profit" or gain. As such the outcome or usefulness will repay the cost. The best form of investment for watch collectors is to 'invest' their time researching their favourite brands such that they can purchase an appropriate piece which yields a high level of personal satisfaction; that way, its 'usefulness'(which cannot be easily quantified in monetary terms) will hopefully be greater than the cost.
If watch collecting is such a passion, how about investing time researching on publicly-listed companies involved in the trade? Examples would be the Swatch Group, Compaignie Financiere Richemont and Bulgari. If such companies offer good potential, then investing in them may be a good proposition. One proven example closer to home is none other than Sincere Watch, a listed entity on the Singapore Exchange.
If you had followed the developments of this company and invested in it since 2001, a time when most investors were more interested in fixed income funds(while technology stocks were struggling to make a recovery) as opposed to retail and trading companies, you would have made a bundle based on today's valuations.
Even The Hour Glass, another watch retailer and distributor, is making its way into the radar screens of some analysts here in Singapore. Do not be surprised if Cortina Watch follows suit. Such entities are now labeled as luxury goods companies and are viewed in a different light as compared to a few years ago.
Hong Kong's Peace Mark Group is also worth watching as it has effectively acquired and integrated Sincere Watch into its organisational structure. Interestingly, Sincere Watch is now below Peace Mark's take-over valuation. Is there any potential upside? Do the math and calculate whether the expected benefits outweigh the costs. If gains can indeed be reaped, such investments will then allow you to adopt an 'invest and spend' strategy on watches, that is using your gains to offset some or all of the costs on your next timepiece, rather than deciding on whether to invest or to spend.
PS: A little sacrifice on my part
.
When it comes to the pricier time pieces, perhaps one of the biggest mistakes most consumers make is have the misconception that they are actually 'investing' in a timepiece rather than spending money on it. Whether you can actually gain from a purchase of a timepiece depends on many factors, among which are the exclusivity(how rare is the watch?), condition(is it well-kept and in pristine condition?) and international recognition(is it a well-recognised brand worldwide?) of the watch.
Some examples would be the Patek Philippe references 5070 and 5980 and the A. Lange & Sohne Double Split. While these are fine examples of highly 'collectible' and 'investment-grade' timepieces, you must take not that not every watch is an 'investment' in itself.
Unless you are a well-informed collector or have privileged access to some of the most sought-after pieces, the best advice for most others is to spend your hard-earned money on a timepiece because you enjoy it. Should you enjoy a gain in future, treat it as a bonus. Bear in mind that the word 'spend' is defined as to "use up" or "exhaust" your financial resources(source: Oxford English Dictionary) as opposed to 'invest'.
Invest, on the other hand, is to place your financial resources into a scheme or product with the "expectation of achieving a profit" or gain. As such the outcome or usefulness will repay the cost. The best form of investment for watch collectors is to 'invest' their time researching their favourite brands such that they can purchase an appropriate piece which yields a high level of personal satisfaction; that way, its 'usefulness'(which cannot be easily quantified in monetary terms) will hopefully be greater than the cost.
If watch collecting is such a passion, how about investing time researching on publicly-listed companies involved in the trade? Examples would be the Swatch Group, Compaignie Financiere Richemont and Bulgari. If such companies offer good potential, then investing in them may be a good proposition. One proven example closer to home is none other than Sincere Watch, a listed entity on the Singapore Exchange.
If you had followed the developments of this company and invested in it since 2001, a time when most investors were more interested in fixed income funds(while technology stocks were struggling to make a recovery) as opposed to retail and trading companies, you would have made a bundle based on today's valuations.
Even The Hour Glass, another watch retailer and distributor, is making its way into the radar screens of some analysts here in Singapore. Do not be surprised if Cortina Watch follows suit. Such entities are now labeled as luxury goods companies and are viewed in a different light as compared to a few years ago.
Hong Kong's Peace Mark Group is also worth watching as it has effectively acquired and integrated Sincere Watch into its organisational structure. Interestingly, Sincere Watch is now below Peace Mark's take-over valuation. Is there any potential upside? Do the math and calculate whether the expected benefits outweigh the costs. If gains can indeed be reaped, such investments will then allow you to adopt an 'invest and spend' strategy on watches, that is using your gains to offset some or all of the costs on your next timepiece, rather than deciding on whether to invest or to spend.
PS: A little sacrifice on my part
.
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