Investing in vintage watches or other collectibles is primarily not about the financial gains for many, but about their passion. However, with careful considerations and if you do not let your adoration cloud your judgement you can turn your passion into sound investment.
Just like art or classical cars, vintage watches and collectibles should be considered as part of your overall wealth and be treated and managed accordingly, so involving an agent or your wealth advisor is strongly advised.
In this article we are going to discuss a few issues you might want to consider before including vintage watches into your portfolio.
What constitutes a vintage watch?
There are many different definitions of what constitutes a vintage watch: starting from anything that is between 25 to 50 years old to 30 and 100 years old or if it was made before 1980. Regardless of which definition we favour, one thing is for sure: age alone is not a determining factor, it does not define a watch as vintage alone. What makes watches with a certain age vintage is the history they come with, their brand, their design and the technical innovations they carry. They are the witnesses of old days.
Are vintage watches good investments?
Vintage watches can be sound investments and can be used to diversify your portfolio. You must be aware that together with other collectibles they are considered as illiquid investments, so you need to carefully analyse what percentage of your assets you can allocate to this category. Since their value is not tied closely to the performance of the financial markets they can also be seen as a kind of security in a poorly performing economic and market environment or like a way of protection against inflation.
Everyone investing in vintage watches must be aware that this type of collectibles has higher risk and should be considered as long-term investments. Furthermore, there is no guarantee for steady income or a substantial return. Trends also may influence the market and they have significant impact on the value of the items in your collection, so you need to make sure to educate yourself and involve experts of this field before committing to any purchase.
What to consider when investing in vintage watches?
Like other collectibles, vintage or antique watches are very special as collectors often are heavily invested in this asset category emotionally as well. Since there is no guarantee for future earnings, always try to invest in items that you yourself can appreciate.
The factors you may want to consider:
- the brand name – as there are some historical info about their performance as investments. The most sought-after brands are: Patek Philippe, Vacheron Constantin, Breguet, Rolex, Jaeger-LeCoultre, A. Lange & Söhne, Audemars Piguet
- the rarity – certain brands and varieties are particularly rare and sought-after collector’s items and as such can have better capital appreciation over time
- the uniqueness – whether the type has a special technological feature, a history or a story connected to it
- overall condition – for collectors with acquired taste a little patina might add to the story of the watch, but less is more in this case as well
- authenticity – original parts are a must, and you should try to aim for all documentation especially for previous bills of sale from past transactions the watch’s service history and provenance
- Geneva seal – a quality seal awarded by an independent bureau in Geneva based on 12 criteria indicating quality
Unlike in case of other classic financial investments, there are additional costs related to collectibles that you need to consider, as insurance, storage and maintenance costs might add up to a quite significant amount over time. Knowing the value of your collectibles is essential, therefore you must involve professionals to appraise it periodically.
Involving your wealth manager in the process is essential, as there are many factors that need to be considered and taken care of to ensure your collection is well protected and your expenses are kept at the minimum level.
What is the best structure for owning a vintage watch collection?
The optimal ownership structure depends on a variety of factors, and it must be aligned with your current wealth plan and your estate plan, so you need to consider many details. For many, these assets are very private and form a special part of their legacy, so finding the best long-term structure that enables them to finance, own, donate and sell their collection in a tax efficient way has utmost importance.
Primus Wealth has the knowledge and the experience to make the international systems work for you and find the optimal structure for your collectibles. Contact us, and our experts are at your service during the whole process.
