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Insider’s guide: Buying watches at auction

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By Adrian Hailwood

Wristwatches are touted as one of the new wave of alternative investments. But, how easy is it to make money out of watches?

Whether you should cash in your pension for some classy wrist-wear depends on what you buy, where you buy it and how much patience you have.

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Buying new is the hardest way to make money as you immediately lose the VAT and depreciation. If you have bought a watch which has a waiting list, you might sell it further down the list for an immediate profit, but this is frowned on by the brands.
Limited editions are sold as having extra value but this concept has been overworked almost to the point of meaninglessness.

There are exceptions when a watch has something really special that captures the imagination of collectors. Bremont’s EP120 Spitfire Limited Edition was such a watch. Originally sold out at £6,500, collectors will now pay up to £14,000 should an example come up for sale.

Buying pre-owned at auction avoids VAT and the initial hit of depreciation, presenting a truer picture of a watch’s worth as opposed to its retail price. Condition is key; buy the best example that you can afford. There are few bargains out there and most watches are cheap for a reason. Box and papers, if the seller bothered to keep them, are a good sign that they took care of the watch itself and add to the resale value.

Buy from a reputable seller who will authenticate the watch both inside and out. It is obvious that fakes have no investment value but avoid customised or after-set pieces as they can be worth little more than scrap. Beware of vintage watches that look too good. An original will always hold value better than an assemblage of parts.

Watches are a rising market, so if you buy quality at the right price the value will increase. You may not beat inflation over the long term, but you are unlikely to lose money. To outperform the market, you need to find a gem that no one else has recognised. With the vast amount of information available online, this is hard to do. Collecting trends do shift over time, especially if a brand’s value rises out of reach of the average buyer. Spot a trend early you may be able to buy good examples and then cash in when the market catches on.

All investments are risky but with watches, that risk is mitigated. Whether you buy new or used, as long as you only buy watches you like, the return on investment is the joy of ownership, even if you never sell them.

This article was taken from the January 2013 issue of WatchPro magazine. If you would like to write a guest column for the magazine email the editor at rachael.taylor@itp.com with your idea.

 

 

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