May 25, 2020

Luxury watches as an ambivalent investment

If you do not want to leave your savings on the Bank, you have many opportunities to invest. There are also luxury watches in question, which can be worth several thousand euros. But to achieve the desired return, one thing above all else is needed: time.

There are luxury watches that are worth twice as much in a very short time – a return most people can only dream of. At banks and savings banks there is virtually no interest, savers sometimes even have to pay for larger sums. If you don’t want to invest in stocks or Gold, put your money in luxury goods – so why not in watches? The catch: only a few models bring money. Without market knowledge, an investment can quickly go to shit.

Many watches on the market will not be able to maintain their value, says Stefan Muser, owner of the auction house Dr. Crott in Mannheim. “In the current area – what you can buy from the jeweler-there are very few models where I would see a potential increase in value. You can only appreciate it, but 70 to 80 percent of the watches, even the high-quality watches from Switzerland and Glashütte, are unsuitable as a capital investment,” says Michael Brückner, who has spent years as an author dealing with watches and other luxury goods. The remaining 20 to 30 percent are above all certain brands and models that have achieved good performance in recent years.

The more original, the more value

These few brands and models are known as “Blue Chips”, Muser explains. This term refers to the high-turnover heavyweights with a high market value on the stock exchange, which, however, does not protect against false speculation. However, such watches are never cheap to get. “That means: You get, what you pay for.”The Top models often cost as much as a condominium. But it is not so easy to buy such watches in specialist shops. The models are hard to get and often sold out for a long time says Joachim Dünkelmann, managing director of the Federal Association of jewelers. They quickly end up on eBay and Co – at a significantly higher price. “There are models that are traded many times more expensive on the market than the list prices of the manufacturers,” explains Dünkelmann.

According to the list price, a new Rolex GMT Master II Pepsi has been priced at 9000 euros since January – it is offered on the Internet for up to twice the price. With other models it is similar. The” Nautilus ” by Patek Philippe is also extremely popular and worth twice as much after a few years.

But it’s not always that easy: “even the full-time professionals can’t predict whether a watch will turn into something or not,” Muser says. For watches to be a good investment, you need – in the truest sense – time. Often years or even decades pass before a watch becomes a collector’s item. Whether an old clock is valuable – or it becomes – depends above all on the state of preservation. Was it serviced in between? Is it in original condition? According to Muser, watches are like old-timers: “the more original it is-the less it has been screwed around-the better it will stay on the market.”Even small technical refinements, so-called complications such as a day date or a chronograph function, are particularly popular with collectors. “The more complications a watch has, the more valuable it is,” explains Brückner.

Watches should be fun

Every luxury watch – whether new or Vintage – is about Image. It is always a “statement on the wrist”, Michael Brückner is convinced. The fact that watches are also regarded as an investment in value is a practical side effect: “some say that this idea of increasing value is only there to compensate for the bad conscience,” says Brückner.

On the one hand, a watch is a piece of jewelry, but as a valuable investment, watches are almost exclusively suitable without any scratches. “If you want to be very strict and buy watches exclusively from investing money, then you should not wear them,” says Brückner. For Stefan Muser, watches are one thing above all else: a passion. Therefore, he advises investing in a watch that gives pleasure. “Just 20 years ago you visited your jeweler and picked out a watch model that was fun.”Almost no buyer has thought about an increase in value. Muser believes that one should approach the matter in the same way today.

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