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Time is Money: Why Watches are Terrible Investments

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For generations, timepieces have been seen not only as functional objects but also as symbols of status, luxury, and technical prowess. Many enthusiasts argue that certain watches can be sound investments, comparing them to artworks or vintage cars. However, when it comes to a practical investment perspective, watches might not be the ideal choice for everyone. Here’s why.

Depreciation Hits Hard

Much like a new car, many watches depreciate in value the moment you wear them or take them out of the store. While there are exceptions (some rare Rolex or Patek Philippe models, for instance), most watches will not retain their original value, let alone appreciate.

High Maintenance Costs

Unlike stocks or bonds, watches require periodic maintenance to keep them running optimally, especially if they are mechanical. Over time, these servicing costs can add up, negating any potential appreciation in the watch’s value.

Limited Liquidity

Turning watches into cash can be a daunting task. There’s no guarantee you’ll find a buyer willing to pay your asking price when you want to sell. And even if you do, the transaction costs (like dealer commissions) can eat into your profits.

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Market Volatility

The watch market can be unpredictable. While today’s hot models might fetch high prices, they could easily fall out of favor tomorrow. Unlike more conventional investments, watches are subject to trends, making them susceptible to rapid changes in demand and value.

Lack of Dividends

Stocks can pay dividends, properties can yield rental income, but watches? They don’t produce any income while you own them. Your only potential profit comes from selling them at a higher price than what you bought them for.

Storage and Insurance Costs

Fine watches need to be stored properly to maintain their condition. This might mean investing in a high-quality safe or even a bank vault. Moreover, insuring valuable watches can be costly, adding to the ownership cost.

Subjectivity of Value

Much of a watch’s value lies in its desirability, which is incredibly subjective. Unlike gold or real estate, which have intrinsic value, a watch’s worth is often tied to its brand, history, or the whim of collectors.

Barriers to Entry for Authentic Knowledge

For those not deeply ingrained in the world of horology, the watch market can be baffling. To truly invest wisely in watches, one needs a vast amount of knowledge about brands, models, history, and the ever-changing tastes of collectors.

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Conclusion

While there’s undeniable pleasure in owning a beautifully crafted timepiece, it’s essential to separate emotional satisfaction from financial wisdom. Watches might bring joy, prestige, and a sense of history, but as investments, they’re fraught with pitfalls.

If you’re looking to invest in a watch, do it for the love of craftsmanship and the appreciation of horological art. But if your primary goal is a solid return on investment, traditional avenues like stocks, bonds, or real estate might be a safer bet.

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