Watches as a store of value?

[Padders72]

At 2.5% CAGR obviously an attrocious store of value given that undated gilt yields were around 10% at the time; Your £2000 invested in gilts would be worth some £16000 today and buy you four of those Rolexes. Although anecdotal, it's a useful cautionary tale, and one I will bear in mind as I have been buying some art as a "hedge" myself.

GS

I understand your point and agree the enjoyment of wearing the watch is difficult to put a price on but £66 per year represented good value to me so selling it for much more than it cost was a great return personally, I am sure others views would vary wildly.
John

Thing is, had you gone for a Sub rather than the DJ it would be worth double or triple that today so it’s not a straight forward asset class. Better still a Daytona but the shine has come of those a fair bit lately.

[Lanark]

At 2.5% CAGR obviously an attrocious store of value given that undated gilt yields were around 10% at the time; Your £2000 invested in gilts would be worth some £16000 today and buy you four of those Rolexes. Although anecdotal, it's a useful cautionary tale, and one I will bear in mind as I have been buying some art as a "hedge" myself.

GS

I understand your point and agree the enjoyment of wearing the watch is difficult to put a price on but £66 per year represented good value to me so selling it for much more than it cost was a great return personally, I am sure others views would vary wildly.
John

But its not £66 per year
Comparing with the gilts, it is £16000 - $3850 / 32 years, so a cost of 300-400 per year.

Is it worth £30 per month to wear a Rolex?

[GoSeigen]

At 2.5% CAGR obviously an attrocious store of value given that undated gilt yields were around 10% at the time; Your £2000 invested in gilts would be worth some £16000 today and buy you four of those Rolexes. Although anecdotal, it's a useful cautionary tale, and one I will bear in mind as I have been buying some art as a "hedge" myself.

GS

I understand your point and agree the enjoyment of wearing the watch is difficult to put a price on but £66 per year represented good value to me so selling it for much more than it cost was a great return personally, I am sure others views would vary wildly.

I wouldn't disagree with that, (though the value in today's money vs the investment in gilts is actually about £375per year), the thing I found interesting is that elite/luxury goods are often perceived as likely to give far better returns than other investments (maybe because only the rich can afford them and they got rich by buying stuff that appreciates rapidly) when in fact quite logically, their returns over the long-term are probably similar to any other asset.


GS

[bluedonkey]

In a way, it's fun disguised as investment.

[stevensfo]

In a way, it's fun disguised as investment.

Yes, in may cases, it's exactly like that.

I was an avid stamp collector as a snotty-nosed sprog and have my late father's stamp album. Great fun, then one day looking up every stamp in the famous Stanley Gibbons album, I discovered that not many were worth more than a few quid at most. I had a sheet of mint yellow stamps from the 70s - can't remember whether 2p, 3p each - and thought they'll be worth a fortune one day, until some kind soul pointed out that millions were printed and I wasn't the only one who had the same idea. Same for first day covers etc. Everybody and their dog were doing it! But all good fun.

Same with coin collecting. I have loads of old silver 3d, 6d coins pennies, farthings etc that must surely be worth millions. Nope! There are still 'loads' of them around.

Steve

PS I did have every single UK Marvel comic 1-100 that I kept in a box in my bedroom in the early 70s, and which my mother threw away when I was on a school trip. Our eldest told me that they'd be worth a fortune by now. But what's done is done. I don't hold grudges. My mum is almost 90.
PPS Anyone know of a care home within the Arctic circle?

[Lootman]

I understand your point and agree the enjoyment of wearing the watch is difficult to put a price on but £66 per year represented good value to me so selling it for much more than it cost was a great return personally, I am sure others views would vary wildly.

I wouldn't disagree with that, (though the value in today's money vs the investment in gilts is actually about £375per year), the thing I found interesting is that elite/luxury goods are often perceived as likely to give far better returns than other investments (maybe because only the rich can afford them and they got rich by buying stuff that appreciates rapidly) when in fact quite logically, their returns over the long-term are probably similar to any other asset.

But the interest on those bonds would be subject to income tax, whilst in practice any profit from the eventual sale of a a collectable would not (most likely, in practice).

And there is a good chance that there would eventually be no inheritance tax on small physical items that can easily be gifted.

You need to take into account both the joy of owning such items and the opportunities to avoid tax.

[GoSeigen]

PS I did have every single UK Marvel comic 1-100 that I kept in a box in my bedroom in the early 70s, and which my mother threw away when I was on a school trip. Our eldest told me that they'd be worth a fortune by now. But what's done is done. I don't hold grudges. My mum is almost 90.
PPS Anyone know of a care home within the Arctic circle?

I bought a box full of 1970s vinyl which I hoped would contain a couple of valuable gems. About 3 years ago, despite the weight, the box was stolen from our house in a burglary. At the time we did a quick reccy to see if anything had been abandoned in nearby bushes without any success. Then about two weeks ago our groundsman was working next to a reservoir which had emptied and spotted the box lying on the bottom. The scroats obviously had found their haul too heavy and worthless and rather than just leave it somewhere obvious had tossed it in the water. Such a waste -- but I console myself that they were all probably only worth about 10p each so they've saved me years of storage and carting around every time we move.

GS

[1nvest]

The point above about the spreads on asset classes are very pertinent. Sovs and gold bars can be traded at a 5% margin if you know what you are doing

Drop in (well yes you need to book a appointment) to Tavex and buy 10+ one ounce gold Britannia's and you'll typically pay spot+3%; Walk over the Bridge and up to Hatton Garden and you'll likely get spot from Auronum. Via web sites such as TheSilverForum trusted members will often buy and sell at around a similar spot+2% type rate (0% spread). You'll have to build up some trust - buy from/sell to a existing trusted member a number of times before you yourself are seen to be trustworthy. I wouldn't buy/sell via eBay, too many untrustworthy buyers/sellers (claim they never received a item, or dispatch something that doesn't fit with the description ...etc.).

Also don't just buy gold/whatever alone, combine it with stocks and periodically rebalance, maybe once yearly. 1980-1999 for instance and without adding a penny you'd have seen your gold collection scale 6 to 10 fold. Then in the 2000's you were reducing ounces of gold to add more stock shares. 67/33 stock/gold and for whatever reason the 67 stock value halved to 33 - there's a reasonable chance that the 33 gold value will have doubled to 67. No overall loss, where rebalancing back to 67/33 has you holding twice as many stock shares as before. Martingale betting style, where you can come out ahead despite there having more losing plays than winning plays. 50/50 had similar overall outcomes, but that can be a bit too much gold for some, however that's in alignment with the ancient advice of third each land (home), merchandise (stocks) and in-hand (gold), assuming your liquid asset wealth is twice your home value. For those in that position they're more inclined to be near or within retirement, in which case there's no need for rebalancing, just start with 50/50 stocks/gold and withdraw your 'pension' from whichever is the higher valued of the two at the time (bulk initial purchase, thereafter just small sales, no further purchasing, which can be easy for heirs).

[kltrader]

Watches are definitely more space-friendly than some other collectibles. Retirement planning with a side of whisky quality control sounds like a plan!

[moneybagz]

Just buy a Rolex Submariner and forget about it. I bought mine 2009 around 3k, retails for around 10k now. They continue to increase each year as Rolex do a great job of keeping prices rising, especially by reducing supply. Models like the steel Subs and Daytona's have a great track record of increasing each year. Servicing costs about £400-£500 every decade which is reasonable compared to the likes of Patek Philippe. The watch doesn't suffer large drawdowns, it's not correlated to stocks and bonds, and it also tells the time.

[moorfield]

And there is a good chance that there would eventually be no inheritance tax on small physical items that can easily be gifted.

You need to take into account both the joy of owning such items and the opportunities to avoid tax.

This thread reminds me that if necessary just like Captain Koons you can hide a valuable watch in the one place you know you can hide something.

[Lootman]

And there is a good chance that there would eventually be no inheritance tax on small physical items that can easily be gifted.

You need to take into account both the joy of owning such items and the opportunities to avoid tax.

This thread reminds me that if necessary just like Captain Koons you can hide a valuable watch in the one place you know you can hide something.

I told my kids not to forget to have the gold crowns removed from my mouth upon my demise, along with my wedding ring. Perhaps I should add a second line item to that instruction?

[MrFoolish]

Most young people these days don't wear watches. In my estimation there will dwindling interest in them and their value.

[Lootman]

Most young people these days don't wear watches. In my estimation there will dwindling interest in them and their value.

You could say the same about antiques, oil paintings, coins, postage stamps, classic cars and so on, and yet they continue to appreciate.

The key is finite supply.

[Bubblesofearth]

Most young people these days don't wear watches. In my estimation there will dwindling interest in them and their value.

You could say the same about antiques, oil paintings, coins, postage stamps, classic cars and so on, and yet they continue to appreciate.

The key is finite supply.

We bought a painting recently by a local artist because we like it and want to hang it on the wall. Investment value, whilst there, was only secondary consideration. I suspect the reason most people buy the items you mention are a combination of utility and investment value. For antiques and classic cars it's obvious. For coins and stamps it's down to appreciation of inherent beauty and a desire to collect.

One of the reasons to buy a watch is to wear it. If that reason is declining in popularity then I can see how it could affect prices. Sure, there may still be an investment case but if you take away the main utility function then IMO it weakens that case.

Finite supply is only relevant if demand is there. There are plenty of things in finite supply that no-one wants - unless someone can convince them otherwise on, for example, eBay by claiming 'extremely rare', 'unique' etc. There do seem to be a lot of mug punters out there willing to part with cash. Thinking about that I did find a carrot the other day in the shape of a .....


BoE

[CliffEdge]

I have a Citizen EcoDrive watch powered by sunlight. You don't have to change the batteries, but if I kept it in a drawer it would go wrong. I like wearing it when I go into town.

[XFool]

I have a Citizen EcoDrive watch powered by sunlight. You don't have to change the batteries, but if I kept it in a drawer it would go wrong. I like wearing it when I go into town.

Snap!

[gnawsome]

I have a Citizen EcoDrive watch powered by sunlight. You don't have to change the batteries, but if I kept it in a drawer it would go wrong. I like wearing it when I go into town.

I still have my late wife's Cit EcoDrive bought Dec 02. Leave on the counter-top and it just keeps going.

I have a SEIKO Kinetic - supposedly powered by natural movement.
It seems as tho' the functional bit needs to be replaced every 3yrs or so. That rather negated the whole purpose of it which was to remove the need for replacing batteries.
It lies in the drawer now...
Replaced by an Accurist Chronegraph for £10 at a car boot sale

[stevensfo]

I have a Citizen EcoDrive watch powered by sunlight. You don't have to change the batteries, but if I kept it in a drawer it would go wrong. I like wearing it when I go into town.

I still have my late wife's Cit EcoDrive bought Dec 02. Leave on the counter-top and it just keeps going.

I have a SEIKO Kinetic - supposedly powered by natural movement.
It seems as tho' the functional bit needs to be replaced every 3yrs or so. That rather negated the whole purpose of it which was to remove the need for replacing batteries.
It lies in the drawer now...
Replaced by an Accurist Chronegraph for £10 at a car boot sale

I have my late father's Seiko Kinetic.

It needs nothing replacing. Just a service about every 10 years, mainly to replace the glass.

The mechanism relies on movement of the wrist. Something that occurs less now that everyone is sitting in front of a computer.

If you haven't used it for a while, then you have to rock the watch from side to side for about 5 minutes to charge the spring. You can hear and feel the mechanism moving. Rather as if something is loose inside.

There may be a small button to press that uses the second hand to show how much power is left in the spring.

But I have to agree that it's not the best watch to use today where nobody moves.

Steve

[Padders72]

The problem with Kinetics and other mechano-electical hybrids is the the capacitors or rechargeable cells they use don't like being flat for any length of time and as noted above, if you leave it unworn for weeks on end can fail prematurely, quicker in fact than a button cell battery can last in a quartz movement. You are very lucky if yours is running well after a decade, maybe you use yours enough to keep the cell happy. I've seen capacitors fail on Seiko's and Omegas that use the same tech in as little as 3 years as noted above. Kinetic really was an answer to a question that no one was asking. Seiko spring drive is another.