W.O.W. Guide: Are Watches a Good Investment?
For as long as luxury watches have existed, the narrative of watches as investments has been a hot topic and remains so to this day. People always want to know the best models or the best brands to take the plunge and invest their money into, but there is no exact art to investing and more often than not you lose money as soon as you walk out of a boutique with your new timepiece on your wrist. A huge part to play in this topic is that the pre-owned luxury watch industry is rapidly rising as demand for certain models increases, and it is estimated that by 2027 the value of the industry could reach over 2 billion dollars. So, it begs the question ‘Are Watches a Good Investment?’ and in this blog I will discuss important factors around this, but at this point it is important to note that nothing that follows is intended as financial advice and is composed of my opinions and ideas surrounding the subject.
Why are watches so expensive?
I believe the key to understanding watches as an investment lies in understanding why they are “luxury items” in the first place. The wrist watch has humble beginnings, a child of the trenches, born out of a necessity for convenient time keeping capabilities in hostile wartime environments that the pocket watch would be unable to withstand. Since then, wrist watch form has continued to thrive and survived through the quartz crisis and the invention of smart devices to be more integral to everyday life than ever before and are bigger than ever. As watches became more common and mass production of hyper accurate quartz movements became more affordable, the need for mechanical watches subsided and subsequently the companies that produced them became less common making watchmaking more of an art. It takes years for a company to design a new movement in-house, craft interesting dials and the teams that create them are often small and use as little machine work as possible to achieve their visions, making their expertise invaluable. Secondly, materials used are at a higher quality than that of any other household or luxury items. The highest quality grades of steel, titanium and gold are difficult to come by and when you’re crafting a horological marvel, you don’t want to let it down by using cheaper materials.
Choosing an investment piece is hard but Rolex almost always offer a safe R.O.I.
What watches go up in value?
Not every watch brand in the world offers a good investment choice and unless you strike lucky and buy a model that becomes associated with a celebrity or get on board with a microbrand in its infancy that will eventually hit the big time, you’re most likely to lose out on any big returns. But there are some brands that release models that will retain their value purely because they are so high in demand and the companies themselves retain their high standards by refusing to budge on production quantities. The watch brands with pieces that hold and frequently increase in value the most are Audemars Piguet, Patek Philippe and Rolex. All three brands have enormously long waitlists and some people wait years to get their chosen models, but what this does mean is that when you get the call and leave a boutique with a Rolex Submariner, Patek Philippe Nautilus or an Audemars Piguet Royal Oak you have likely already made money on your purchase. Other ways to significantly increase your return on investment is the piece you purchase is part of a limited run collection, features an interesting or innovative complication and most debatably if it is paired with its original box and papers. For collectors these days a huge discussion lies around having a box and papers when purchasing a second hand watch and certainly can increase the price of a full set as it provides some authenticity to your purchase, but in our video with Josh below you will see that this hasn’t always been the case…
Are watches a good investment?
In short, watches can be a good investment if you invest in the right brands and are particular about the models you go for. Diligent research is always needed in order to fully ratify a purchase that will go into the tens of thousands of pounds. Another aspect to consider is that you’re unlikely to make huge returns at point of purchase, it can take years for value to start creeping up and the condition the watch is in will play a big part so be prepared to not be able to fully appreciate the piece you spent so much money on. Not to mention the fact that if you join a Rolex waitlist, get the call and then attempt to flip the watch immediately, you run the risk of being blacklisted from ever buying a Rolex again if you get found out.
The only real piece of advice I can give, that is entirely my opinion, is to buy watches for the pure enjoyment of the hobby and of wearing the pieces themselves. Where they look best is worn on the wrist. There are plenty of great examples of watches without boxes and papers that are actually more affordable as back in the day you were never expected to keep them. If you like the watch, buy the watch, wear the watch.
Check out our other blogs here or find your next timepiece here.
Written by Piers Mansell for Watts on Watches.
