I’m constantly looking for exceptional values in the world of investment grade antiques. Now that a new year is upon us, I feel it is a good time to release my list of the top three most undervalued antiques of 2017. If you can spare the cash, these fine antiques will not only look great in your house (or on your wrist), but should also prove to be excellent long-term investments.
Vintage Mechanical Wristwatches from U.S. Makers
Vintage mechanical wristwatches are one of the hottest properties out there in the world of antiques right now. They are stylish, functional and wonders of 20th century engineering in miniature. But not all of them are equally in demand at the moment.
While the luxury European vintage wristwatch brands – Rolex, Omega, IWC and Jaeger-LeCoultre, to name just a few – are currently highly sought after, the American manufacturers have languished. Some of the best known American watch companies were Hamilton, Elgin and Waltham. Bulova, Benrus and Gruen were three more U.S. watch companies that sourced most of their movements from Europe, but are still usually considered American companies by collectors.
I think collectors often ignore U.S. vintage wristwatches because these manufacturers went bankrupt back in the 1950s and 1960s due to intense competitive pressure from their European counterparts. To compound the problem, many of these American nameplates were sold off to low end, overseas watchmakers. These foreign makers then exploited the remaining cachet of the American manufacturers by flooding the markets with cheap, nasty versions of these watch brands in the 1970s and 1980s. Many people have accidentally conflated these later, inferior wristwatches with the original, high quality wristwatches produced by the pre-bankruptcy American watch companies before 1970.
Overlooked, vintage U.S. wristwatches represent exceptionally good value in today’s antique market, especially the higher end models in solid gold cases. Investment-oriented buyers should look for models that still run and have fully jeweled movements, with a minimum of 15 or 17 jewels. Once the vintage wristwatch market overcomes its irrational obsession with European models and discovers that a comparable watch from a U.S. maker can be purchased for between 1/5 and 1/10 of the price, that value gap is sure to narrow.
Japanese Antiques
Japanese antiques are, simply put, some of the finest handcrafted items known to man. Made from the 17th century straight through the 20th century, investment-grade Japanese antiques span a vast range of objects, including tsuba (samurai sword guards), netsuke (miniature sculpture), gold and silver coins, lacquerware and woodblock prints, among others.
The Japanese national character strives for both harmony with nature and perfection of spirit. These attributes combine to beautiful, often stunning, effect in Japanese antiques. In addition, most Japanese antiques were painstakingly, laboriously handmade. In today’s mass-produced, modern world, handmade antiques possess an allure and appeal that is almost magnetic. And few cultures produced handmade items better than the Japanese.
Given the many positive characteristics of Japanese antiques, it is difficult to believe they could possibly be undervalued in today’s market. But they are. No more than a few hundred dollars will give you access to a broad range of choice, investment grade Japanese antiques. And only the very finest Japanese antiques sell for more than $700 or $800 right now.
The reason the value of Japanese antiques have remained stubbornly low is the Japanese economy. Japan experienced a massive twin stock market and property bubble in the late 1980s. These bubbles burst right at the beginning of the 1990s. Since that time, Japan’s nominal GDP has essentially flat-lined. And because nominal GDP is the main driver of aggregate antique prices, the valuations of Japanese antiques have stagnated along with Japan’s economy.
However, I don’t believe this is a permanent state of affairs. And not because I believe the Japanese economy will suddenly and miraculously improve. Instead, I think Japanese antiques are steadily gaining a loyal following among art and antique connoisseurs overseas, especially in the U.S. Eventually this increased demand will soak up any excess supply, driving prices skyward.
Antique Silverware
A classic of the antique market is fine, old silverware. It has been a staple of wealthy, aristocratic households for centuries, providing a convenient way to store and transmit tangible wealth across generations. As an added bonus, investment grade antique silver flatware and hollowware is not only elegantly crafted, but also simultaneously functional.
However, in spite of possessing considerable intrinsic value and tremendous aesthetic appeal, antique silverware is shockingly inexpensive today. This development is even more puzzling given the fact that the price of silver bullion has tripled or quadrupled over the last 15 years. In contrast, antique silver flatware and hollowware has only doubled in value, and sometimes not even quite that.
This means the premium on most antique silverware, the monetary amount in excess of the bullion value of the piece due to its artistic merit, has actually decreased in percentage terms in recent years. But this situation is a boon to savvy antique collectors and investors. A variety of beautiful, versatile and eminently valuable solid silver flatware and hollowware sets are available for just a few hundred dollars, or even less. And unlike some antiques, historically important antique silver from as long ago as the late 18th century – almost 250 years old – can still be readily found in the marketplace for modest prices.
I believe this trend in the antique silver market is largely driven by secular changes in living arrangements among the younger generation. More young people are now living in apartments, condos and townhouses that do not have separate, formal dining rooms. This lack of a formal dining space, coupled with the modern tendency toward very informal meals and gatherings, means that antique silverware is often perceived as superfluous.
However, this thinking is in error. Antique silver is a very versatile and practical luxury item. It is just at home in a small, intimate gathering with wine and tapas as it is in a formal banquet for royalty. So I don’t believe today’s low prices for fine antique silverware will persist forever.
