Wearing the wealth well

With most of the world in an economic downturn, those with any money to put aside for a rainy day are looking for somewhere safe to tuck their baht, preferably in a place where it will grow.
 Natchamai Asavaneramit, operation director of Pendulum Thailand, recommends spending it on luxury items. No, she’s not talking about blowing thousands of baht on a dress or a bag. Her advice focuses more on precious jewellery, perhaps even a watch.
“Unlike other kinds of investment that shows only figures in your bank book, luxury products like jewellery or a watch have sentimental value. You can wear them and make a gift of them to a loved one, who will be happy to receive them,” says Natchamai. “And of course, just like those figures in the bank book, their value will continue to increase.”
Natchamai was among the guest speakers at last week’s Bualuang seminar hosted by Bangkok Bank on the concept “Luxury Investing 2012”. She was joined by Tanarat Pasawongse, managing director of Hua Seng Heng Gold Futures and Suriyon Sriorathaikul, managing director of Beauty Gems.
All three say that with stocks struggling with the economic slowdown, the Euro in serious trouble and the low interest rate offered by the banks, rare and precious gemstones, luxurious timepieces and gold are among the hottest commodities on the market. With prices spiralling ever higher, now is a good time to explore new investment opportunities.
“The investment in premium watches has been very good in recent years. With the European market continuing to shrink, more limited editions are being allocated to Asia, especially China,” Natchamai explains. “In the past, Thai watch collectors often had to wait for more than two years but now they can get the one they like much faster. In terms of investment, the retail price of the watch market increases at an average rate of 5 to 7 per cent per year based on the gold price and currency exchange.”
Natchamai also points out that big money can be made if a collector happens to own a brand that’s limited, rare and in demand at a particular time. “The retail price may be Bt170,000 but on the grey market, that could go up to Bt250,000. It depends on the popularity of the watch,” she adds.
Suriyon, who represents one of Thailand's largest gems and jewellery wholesalers and retailers, says that while traditionally diamonds have been known as women’s best friends and men’s worst enemies, in the current economic crisis, the sparkler is everyone’s best pal. “A few carats in the wife’s safety deposit box could save a factory from closing down,” he says bluntly.
“Diamond is the most valuable gemstone. Its price increases every year. For example, according to records over the last 50 years, a one-carat D-Loupe diamond increased in price from US$2,700 in 1960 to $13,900 in 1990 and to $24,500 in 2000. The flooding last year shows that this kind of jewellery is an investment you can easily carry and costs nothing to look after. The risk of holding is considered less than other kinds of assets unless you lose it, especially in tissue paper. I sometimes receive telephone calls from ladies who took off their diamond rings to wash their hands and placed the jewel on a tissue only to throw it away! It’s precious, you need to keep it safer than that,” Suriyon says with a smile.
Gold too is an excellent investment and a popular commodity all over Asia, not just among the rich. More sophisticated investors prefer their gold not in jewellery but in bars and derivative contracts. But gold expert Tanarat says that this year the gold price is not as exciting and less prone to such big fluctuations. “Short-term investors are likely to benefit more than long-term holders. I would encourage allocating some investment in gold when the price goes down anytime from now until 2015. It’s speculative yes, but uncertainty in the foreign-exchange market will keep the gold price volatile. The price for the rest of this year could reach up to $1,800-1,850 an ounce,” he says.
Advances in technology have done away with the queues outside the gold shops. “At Hua Seng Heng, we used to keep our call centre open until midnight and the phone lines were usually jammed. Now, with online trading, more than 3,000 people can trade within five minutes,” says Tanarat.
Taweesak Supreyaporn has yet to start trading in gold but he has been collecting watches for more than five years. “It started more as a hobby because I really love watches but then I realised that it’s also a good way of saving and making money,” he says. “I’ve found that the key is to choose a brand that can be traded easily, which has stable prices and loyal customers the world over.
“I really believe that putting money into premium watches is better than leaving it in my bank account or investing it in stocks. After all, it looks good too and it makes me feel happy.”