Luxury watches from top brands like Rolex, Patek Philippe, and Audemars Piguet are often seen as valuable investments in addition to their functional purpose of telling time. However, there are several factors to consider when deciding if luxury watches make smart investment assets.
Appreciation Over Time
Some luxury watch models do tend to increase in market value over decades, sometimes exponentially. Iconic sports watches like the Rolex Daytona, GMT-Master, and Submariner command prices today far above their original retail value. For example, the Rolex Daytona sold for around $200 in the 1960s but Paul Newman’s Rolex Daytona sold for $17.8 million in 2017. So, as collectibles, some luxury watches clearly appreciate substantially.
However, not all luxury watch models or brands appreciate consistently. Trends come and go. And no returns are ever guaranteed on watches, as with any investment. Do thorough research before assuming a particular luxury watch will increase in value.
Inflation Hedge
Luxury watches have historically had strong resale value and demand globally, making them an attractive inflation hedge. When financial markets struggle, luxury assets like watches, art, classic cars, etc. often hold value better than stocks or currencies.
So, luxury timepieces can represent a reliable store of value, retaining purchasing power over the years. This may provide investors with psychological comfort during times of economic uncertainty. You can also use other forms of payment to purchase luxury watches. For example, you can buy Rolex’s with Bitcoin or crypto, making it a smart way to use your cryptocurrency gains.
Illiquidity
The high-end watch market is not highly liquid for trading in and out quickly. Reselling luxury timepieces often involves auction houses, watch collectors, pawn brokers, or professional dealers. The process takes more time and effort compared to liquidating publicly traded assets.
So, luxury watches do not make wise investments if easy liquidity is a prerequisite. The buy-and-hold strategy is best aligned to maximize their value and tentative returns over the very long term.
How to Choose the Right Investment Watch
When selecting a luxury timepiece mainly as an investment, the watch brand itself matters enormously.
Leading names like Patek Philippe, Audemars Piguet, Rolex, and A. Lange & Söhne retain value best over time. Within brands, choose ultra-high-end models that are iconic, with proven demand among collectors.
Current production stainless steel sports watches from these brands are safest. Vintage models can bring higher returns but assessing authenticity is critical. Conservative, timeless style also predicts appreciation best rather than very large or ornate pieces.
Do extensive research on actual resale prices for that exact reference number before purchasing to confirm likely future demand.
Iconic luxury watch models can absolutely be excellent investments as collectible assets that garner higher prices over decades. But not all luxury watches appreciate reliably, so discerning the potentially growing value of specific pieces is key. As illiquid assets that may pay off substantially yet slowly, luxury watches simply serve a different investment purpose than stocks, bonds, or savings accounts.
Approached realistically, high-end mechanical timepieces can be considered both beautiful objects to admire and smart alternatives for diversifying one’s holdings.
