If you like watches, you might feel that certain watches keep value better than others, and you are 100% correct. Certain watch brands are amazing in their designs; however, the perceived value on the secondary market is not as high as some other watches on the market.
Every time I look at watches to add to my collection, I make sure that my overall watch collection is diversified like stocks. By having many different types of watches as well as brands, I lower my overall risk in case some watches lose a lot of value.
Investing in watches is fun if you have the right approach, but many of my friends like to collect watches because they enjoy the horological aspect of watchmaking. They enjoy the tiny details on the dials, the craftsmanship of the movements, and the quality materials used to create the timepiece.
Have more than one watch
Like investing in stocks, you want to make sure you do not invest in only one big company which is earning high dividends. That would be an unnecessary risk because if the company starts underperforming, your dividends might stop coming.
With watches, it is the same. When you invest only in one watch, you might be able to buy a watch that is increasing in value and might keep on going up, but it might start going down in value as well, especially in the secondary market.
The example is the Rolex Batman Rolex GMT Master II 126710 BLNR, which was trending on the secondary market close to $17,000, but now the price is around $14,000. Yes, if you buy the watch directly from Rolex Authorized Dealer (AD), the watch is selling above MSRP, but it’s challenging to get that watch if you do not have a reputation with the AD.
In the end, it’s a great idea to have more than one watch because you might realize that wearing the same watch every single day does not make you happy, and you want to experience different watches on your wrist as well diversifying your watch collection.
Which watches should you have?
When investing in stock companies, you want to understand the company and know what they do well. Many great investors understand the companies as a whole and that makes them comfortable to invest in them. The same principle applies to watches.
You want to know about the brand and why so many people like the brand and what is so special about it. If you understand the core values, you will gain more valuable information which you can use to your benefit when you buy the specific watch.
Let’s say you already have a Rolex because so many people are talking about it, but you know that you would like to explore another watch brand that might not be as mainstream yet. Go and learn about that specific watch brand. When you learn more about the watch, you might realize that the story behind the watch, the movement or the material used “speaking” to you and you want to experience the timepiece.
How to minimize risk and increase ROI
When you are investing in stocks the key component is diversifying. You buy international stocks, different classes and both small and large companies to minimize your potential risk when investing.
Investing in watches is very similar in sense of diversifying among different watch brands. Some watch brands with specific watch models are well known to appreciate over time compared to other brands.
Also, what you need to keep in mind is that if the recession happens, many people feel like gold is a good way to protect their downside. That’s why some of the gold watches appreciate in value even faster than other precious materials.
The watches known to appreciate in value…
Rolex stainless steel models are very sought after watches these days. It’s almost impossible to just walk into a Rolex store and buy the watch on the spot.
Audemars Piquet watches have some specific watch models which are very popular. Royal Oak is one of the popular models from AP.
Patek Philippe Nautilus 5711 is known to appreciate for a while. The Stainless steel with the black-blue dial was in production for 43years and the supply wasn’t enough to satisfy the demand people have for this particular timepiece.
Omega Speedmaster Moonwatch has so many different variations, however, the pre-moon and the first moon watches, as well as the special editions, are among the once which appreciate in value significantly.
If you get some of these watches in your collection, you will be able to minimize the risk of losing a lot of money in your overall watch collection because these watches have been known to keep their value, if not appreciate over time.
There are other watches that might appreciate in value as well. But in the end, pick the watch you will enjoy the most. You do not want to keep on wearing watches you do not like. Plus, it is always nice to have watches for different situations.
The blog post was written by Honza Hroch the founder of Value Your Watch Marketplace.
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