Passion & Money: Your Best Investment 2014 Fits on Your Wrist
Coutts Index reveals passion investments have risen 77% since 2005, outperforming shares
Classic cars rise 257%
Classic watches up 176%
Billionaire property doubles in value
Passion investments returned 77% (local currency terms)* since 2005, outperforming shares, according to the first edition of The Coutts Index: Objects of Desire. Launched today, the new Coutts Index aims to provide the global benchmark for monitoring the performance of passion assets.
The Index, developed in conjunction with Fathom Consulting, captures the price return in local currency (net of the holding costs) of 15 passion assets across two broad categories: trophy property and alternative investments. Alternative investments can be further broken down into fine art, collectibles and precious items.
Of all the alternative investments Coutts examined for the Index, classic cars have returned the most since 2005, rising by 257%, outpacing all other investments by more than 80 percentage points over the seven and-a-half-year timeframe. Classic watches have also proved they can stand the test of time, rising by 176% from 2005 to 30 June 2013.
Jewels returned 146% in comparison, while the standout performer in the fine art space is the traditional Chinese works of arts sector, which rose by 163% between 2005 and 30 June 2013.
Over the past seven and a half years, the Coutts Index, based in US$ terms, has risen by 82% – over the same period, the MSCI All Country Equity Index has risen by 53%, based in US$ terms.
The Coutts Index incorporates a real estate component supplied by Savills World Research. Trophy property comprises ‘billionaire’ residential properties in the ten prime global city locations and ‘leisure’ properties in the world’s most desirable leisure destinations associated with these cities. Both measures lost value in the run-up to the global recession, but billionaire property values have risen strongly since, rising 100% from 2005 to 30 June 2013.
Mohammad Kamal Syed , Head of Strategic Solutions at Coutts, said: “The Coutts Index has been created to measure passion assets, or objects or desire, in terms of performance, cost of storage and currency. But while many alternatives have provided spectacular returns, there is more to investing in these assets than price appreciation. For many people, profit is furthest from their mind.”
He added that for many ultra-high-net-worth individuals, it is less about investing and more about purchasing – purchasing assets driven by their emotions.
“The benefit is more than just profit. Owners can bond with like-minded people in an elite network, with assets offering escapism and a chance to re-enact history. Indeed, there is one thing that the Coutts Index, for all its robustness, can’t measure – and that is happiness. The idea of someone paying $50m for an uncomfortable old car, with windows that don’t work and a noisy engine, seems illogical. In many ways it is. But the happiness such a car can bring is immeasurable.”
Coutts commissioned articles and interviewed experts for its first edition of the Coutts Index. They included Stanley Gibbons, the world’s leading stamp dealer, Berry Bros. & Rudd, the wine merchant and auction houses Sotheby’s and Christie’s.
Quentin Willson, broadcaster and classic car specialist, looked under the bonnet of the classic car market. He wrote: “If you had bought a 1970s Ferrari Daytona for £50,000 in 2003, it would be worth £250,000 today. A 1960s Aston Martin DB5 bought for £60,000 a decade ago would now command £350,000.”
“The question is whether the classic car market has peaked. I’ve been wondering whether the bubble will burst ever since prices started to rise in 2009. But they have kept on rising and were up 27% in the first half of 2013.”
Nick Foulkes, author, historian and watch enthusiast, revealed why he has been fascinated with watches since he was a child. He wrote: “I can still remember writing an article in the 1980s, saying that the price of an old ‘Paul Newman’ Rolex Daytona was about to overtake the price of a new one. Now you will be lucky to find one for under £70,000.”
“But not all watches will burn a hole in your pocket. Rolex recently launched some particularly attractive Day-Date models with brightly coloured dials. These recalled the original ‘Stella’ dialled Rolexes and are now creeping up in value, but these Day-Date models can still be purchased for four figures. And I still think that vintage Cartier watches are hugely undervalued.”
Coutts is the wealth division of Royal Bank of Scotland Group. Coutts serves clients from over 40 offices across the world offering tailored wealth management, banking, trust and tax services. Coutts is headquartered at 440 Strand, London with offices in other key international financial centres in Zurich, Geneva, Hong Kong, Singapore and Dubai. The division includes Adam & Company providing private banking services from Edinburgh, and RBS International, based in the Channel Islands, which provides offshore banking.For further information please visit www.coutts.com
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Gentleman, synchronize your watches and call up Marty Mcfly as we head back to 1970 for a glimpse at the Omega Chronostop Genève.
But before we do, we must stop to doth our caps at the wonder of Omega’s craftsmanship. Originally created in 1848, this high end Swiss watchmaker has been a favourite with many companies over a long period of time.
In 1917 when war rang out over Blighty, the British Royal Flying Corps selected Omega as their principal timekeepers whilst the US army took the same decision one year later.
In addition, Omega has been the weapon of choice for NASA and their astronauts whilst it even landed on the Moon at the end of the 1960’s. Now that’s cosmic!
Yet Omega has a number of different sporting connections and has had close ties with the Olympic Games for the best part of 70 years. Since 1932, it has acted as the timekeeping device and will be in the full spotlight when it comes to Rio 2016.
Currently, they are aligned with a wealth of actors and sporting stars including the likes of George Clooney, Spanish golfer Sergio Garcia and 2012 US PGA champion Rory Mcllroy. Now that’s the way to strike a winning partnership.
So what of the Omega Chronostop? As classic as a Disney film at Christmas, the 1970’s sparked a genuine retro design appearance. The Chronostop was launched four years earlier in 1966 and is considered to be one of the great sports watches of its kind.
In fact, the Chronostop version has received notoriety thanks to awards at the respected “Federation Horologer” contest.
This came before Omega’s intention to enter the International World Exhibition which took place in Montreal the following year. That’s quite enough build-up don’t you think so let’s drill down into the features of this particular model.
Genéve timepieces can plunge to depths of 30 metres while they offer more than 15 individual jewels and a host of impressive movements. There are big rectangular hour markers that can be seen on the 35mm face as well as a striking black dial.
Check out the bright orange timing feature not to mention the predominant oval bezel made from polished steel. This is precisely the same for the case back and is officially stamped.
Meanwhile, the highly regarded Omega Chronostop can be found toward the upper dial with the hippocampus symbol above the 12 o’ clock mark. Other highlights include Omega’s very own 865 movement reflecting their timely contribution to quality.
Suitable to impress at a casual pub lunch or dressed up at a trendy box social, this elegant beauty is ideal for any occasion. But as this timepiece was causing a stir, what about those world events?
Forget about tablet devices and Ipads as 1970 saw the floppy disc invented and the World Trade Centre was finally completed. It was also a time of sorrow and coming together for many screaming teens and adults as the Beatles finally said Adieu and parted company.
Perhaps they were right…maybe all you need is love.
Written by Simon Lazarus
Smart fashion is now a wise investment. – The hedge fund on your wrist.
Investment-quality timepieces gain popularity amid market turmoil.
The world’s economies and stock markets have come to resemble the house of horrors and roller coaster, but there is nothing amusing about the summer of 2011 for investors. Bonds yields are at record lows even after Standard and Poor’s historic downgrade of the USA’s credit rating. Precious metals have risen steeply and then nosedived. Demand for gemstones and ethical issues are causing doubt. All of this leaves you with few vehicles to protect the assets.
One shining ray of light in the darkness is the fine watch market. Unlike art and antiques, which require more expertise and carry more risk due to the volatile nature of the market, high-quality genuine watches are attracting investors interested in stability and an investment they can understand. Even those strapped for cash are benefitting from selling what was once strapped to their wrist.
Fashion is less of an issue with a timepiece because more people wear great watches than collect great art, and a beautiful timepiece is more likely than painting or sculpture to be regarded highly by future generations and become an heirloom. Experts in horology are relatively easy to find, and their value assessments are likely to be an accurate reflection of the real market value for a given timepiece.
Many news sources, finance pundits, and investment advisors are reporting that alternative investments are gaining in popularity, but investors find few categories they can trust in troubled times. Add the advantage of being able to wear an elegant timepiece that has an actual function and owning an investment-value timepiece becomes a very attractive notion.
Worldwide increased demand has made the stock prices of manufacturers and retailers high enough to be reported by numerous sources. The following articles mention the record high prices of auctioned art, antiques, and jewelry (including luxury watches), the rising stock prices of watchmakers and dealers, and the sale of watches by some who have been hit hard by the global recession:
AOL Daily Finance’s The Motley Fool – Is Fossil the Perfect Stock? – http://www.dailyfinance.com/2011/08/11/is-fossil-the-perfect-stock/
Bloomberg – Swatch First-Half Profit Rises 24%; Increases Hengdeli Stake – http://www.bloomberg.com/news/2011-07-28/swatch-first-half-profit-rises-24-increases-hengdeli-stake-3-.html
Bloomberg – Packard’s Vacheron Constantin Watch Triples to $1.8 Million at Christie’s – http://www.bloomberg.com/news/2011-06-15/packard-s-vacheron-constantin-watch-triples-to-1-8-million-at-christie-s.html
Bloomberg – Christie’s $5.8 Million Singing-Bird Pistols Lift Watch Sale – http://www.bloomberg.com/news/2011-05-31/christie-s-5-8-million-singing-bird-pistols-lift-hong-kong-sale-to-record.html
Boston Irish Reporter – Hangzhou store sales data: luxury half a year of links of London gold jewellery or surprising – http://www.bostonirish.com/node/15280
Chicago Sun-Times – Lou Gehrig items bring nearly $1M at Rosemont auction – http://www.suntimes.com/news/metro/6880321-417/lou-gehrig-items-bring-nearly-1m-at-rosemont-auction.htm
CNN Money – Pawning Rolexes to make payroll – http://money.cnn.com/2011/08/02/smallbusiness/small_business_loans_pawn_shop/index.htm
Yahoo! News – The Collections of Movie Icon Tony Curtis Are to be Offered at Julien’s Auctions in Beverly Hills – http://news.yahoo.com/collections-movie-icon-tony-curtis-offered-juliens-auctions-070858914.html
Cover image courtesy of Alon Ben Joseph
The movement was introduced at a press conference at the Cité du Temps in Geneva on January 17th by Raynald Aeschlimann, OMEGA Vice President and member of Swatch Group’s Extended Group Management Board. Mr Aeschlimann opened the press conference, welcoming the media and introducing Jean-Claude Monachon, OMEGA Vice President and Head of Product Development, Michel Willemin, CEO of ASULAB, Thierry Conus, the Director of Research & Development at ETA and Mathieu Oulevey, a Tribology and Materials engineer at ETA.
In his opening remarks at the press conference, Mr Aeschlimann gave credit to Swatch Group’s unique ability to benefit from the contributions of the best engineers and researchers from all of its brand and companies. He added, “All of the heroes are here – not only my colleagues from OMEGA but from ASULAB and ETA. It was only through their shared creativity and enthusiasm that we could introduce this important innovation to you.”
The technlogy developed by the team led to the first prototype of the movement, which has been fitted in an OMEGA Seamaster Aqua Terra. Unlike other efforts to combat the effects of magnetism, the OMEGA movement does not rely on a protective container inside the watchcase but on the use of selected non-ferrous materials in the movement itself. Several patents are pending for the new movement.
Jean-Claude Monachon reminded the attendees at the press conference of OMEGA’s long history of technological innovation, showing slides of highlights going back to 1894. He went on to point out that magnetism has always been an issue for watchmakers, adding that magnets are now more present in our daily lives than they have ever been before. Watchmakers have to deal regularly with the issue of magnetism, as it is necessary for them to demagnetize mechanical watches whose performance has been compromised by exposure to magnetic fields, a problem that will be solved with the new movement.
He explained that G. N. Hayek, the CEO of Swatch Group, challenged OMEGA to create a totally non-magnetic watch and announced that OMEGA, with engineers, scientists and metallurgists from its sister companies had met the challenge.
Michel Willemin’s presentation focused on issues of magnetism in daily life. He gave members of the press a brief primer on magnets and magnetism and pointed out that the evolution of the strength of permanent magnets was a key motivation behind the development of the movement.
Thierry Conus explained how magnetism had been dealt with previously, including inner cases designed to limit the effect of magnetism. He pointed out the limitations of the approach including the facts they couldn’t handle the challenge of the increased strength of permanent magnets and that, from an aesthetic standpoint, they block the view of the movement. He then showed a short film showing how a conventional mechanical watch exposed to high levels of magnetism stopped immediately and dramatically lost its accuracy. The OMEGA prototype was subjected to even higher levels of magnetism (15,000 gauss) and continued to perform. Testing showed that the watch was as accurate after its magnetic exposure as it had been before.
A live demonstration was then made that offered compelling and conclusive evidence that OMEGA’s new >15,000 gauss movement is a landmark development in watchmaking.
OMEGA expects to present the technology at the Baselworld trade fair in April. The new movement, the OMEGA Co-Axial calibre 8508, should be introduced to the market in 2013.
Courtesy of OMEGA
www.omegawatches.com and @omegawatches