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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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
A gentleman’s stainless steel automatic Rolex Oyster Perpetual Comex Sea-Dweller wrist watch circa 1979 (issued to Comex in 1981, reference 2236). The black dial with luminous hourly markers and hands, date aperture to the three o’clock position, with a black bi-directional bezel, round case fitted with Oyster bracelet with flip lock clasp, reference 93150, case model 1665, serial number 6193253, movement calibre 1570 – numbered D121247. Case diameter 39mm.
What makes the COMEX unique and collectable is its story. And this is a story about conviction and devotion. In a time when the Russians and Americans were competing to reach the moon, a Frenchman by the name of Henri Delauze realized there was another frontier just as hostile and difficult to master, despite being only a step away from earth’s shores: the Oceans and the bottom of the World.
Photo courtesy of Fellows Auction House
Henri embarked on the mission “To boldly go where no man has gone before” and in 1961, in the legendary port of Marseilles, he founded the “Compagnie Maritime d’Expertises” or COMEX as we have come to know it. Like a modern Phileas Fogg in true Jules Verne spirit, COMEX set out with the ambition to explore the depths of the world. With this came the complications of the increasing atmospheric pressure exerted at increasing depths. COMEX developed and made some ground-breaking advances in the field of deep-sea nautical exploration and it become evident that accuracy and timing were crucial factors in staying alive.
Due to helium causing explosive decompression by entering a watch, timing was under threat. To find a solution, COMEX initiated a collaborative partnership with Rolex who embraced the challenge and came up with the HEV – Helium Escape Valve. Fitted on a Rolex 5513, it solved the immediate problems; but because it had not been made in stainless steel, oxidation gave the early prototypes a short life span. Room for improvement was needed and in 1972 Rolex launched the 5514, fitted with an escape valve made of stainless steel. The blueprint for the forthcoming Sea Dweller was made and Rolex had conquered the depths.
This is a story of the successful collaboration of a mission and a brand to solve a key problem – to go further, deeper and where no man has gone before. Added to the uniqueness and rarity of this true historic timekeeper comes the fact that a COMEX marked watch was never sold at any authorised dealership. It was awarded to the brave men of COMEX or officials who made the COMEX dream possible.
This is the beauty of vintage, and if you are looking for value and a sound investment look no further.
Rolex 6236 Jean-Claude Killy Sets a World Record in Christie’s December 14th, 2012 Auction: An Analysis
By MEEHNA GOLDSMITH
On Friday, December17, 2012, a Rolex Ref. 6236 “Jean-Claude Killy” manufactured in 1960 went up on the auction block. Estimated at $120,000-180,000, it fetched an astounding $638,500, which is a world record for the reference. The watch is referred to as the Jean-Claude Killy because Olympic gold medalist Killy, who won three events in 1968, wore this model of watch.
Rolex 6236 Jean-Claude Killy
Up until last year the Jean-Claude Killy, which is a triple calendar chronograph, was one of the most complicated watches Rolex ever made. Last year, Rolex got back into the complications game when they released the Sky-Dweller, an annual calendar with two zones operating off a sophisticated bezel system and containing a new movement, calibre 9001.
Think about that: in over 50 years Rolex made less complicated pieces rather than trying to top themselves and the competition. When quite a few watch brands duke it out to impress with ever more complicated watches, Rolex decided to sit back and observe. But then again Rolex has always marched to the beat of their own drummer—and with great success.
Courtesy of rolexpassionreport.com
The series of triple calendar chronos deemed the “Jean-Claude Killy” was produced for only 20 years starting in the 1940’s. Cased in stainless steel, yellow gold and pink gold, it includes references 4767, 5036, 6036 and concluded with the Ref. 6236. The Ref. 6236 can be recognized by the larger, more prominent bezel that is clipped to the main body of the case.
This particular stainless steel example features a two-tone dial and applied square and Arabic numerals, though other designs were produced. The outer date ring in blue perfectly frames the Day and Date windows at 12 o’clock and the Dato Compax layout. The “six” and “nine” are now closed, indicating it’s from a later production. Rolex collectors look for consistent aging on the dialand this watch’s typical short hour indexes with a luminous dot towards the outside have turned a warm beige- brown which matches with the luminous material on the hands.
Adding to the provenance, the particular example of the Ref. 6236 comes from the Gordon Bethune collection. He was the CEO of Continental airlines and responsible for one of the greatest turnarounds of a company of that magnitude in history. Moreover, he loves watches and was a savvy collector. You can hear Bethune’s thoughts on how to collect and his strategy in our interview here.
As we know, in this market especially, condition is king. This particular Ref. 6236 stands as an example to the others in its midst. Thick angled and faceted lugs hug a crisp case that still clearly shows the model and reference numbers, while the oyster bracelet with its clasp dated 3/59, the third quarter of 1959, seems to be original.
All and all we’ve got a super package of the 4 Q’s: quality of maker, rarity, condition and provenance all lining up in a row, a quadruple whammy! And that’s why this Ref. 6236 set off a fierce bidding war that lifted the result to a world record.
Original article by Meehna Goldsmith, editor-in-chief of Longitude, Christie’s blog for collecting watches