Although luxury watches are typically purchased for their style, functionality, and status symbol, they can also be a great addition to an investment portfolio. Contrary to what some people might tell you, luxury watches (like Rolex, Patek Philippe, and Audemars Piguet) are a good investment…at least, they can be…and on multiple levels. If watches weren’t a good investment, there wouldn’t be such a strong watch collector community across the globe, and watches that were purchased for damn near pennies wouldn’t be selling for six-plus figures decades later.
In the world of luxury watches, time is money…and money is time!
In this post, we are going to prove our point as to why (some) luxury watches are a good investment, what to look for when purchasing a luxury watch if resale value is important to you, the best brands and models of watches for investment, how and where to buy luxury watches that make for a good investment, and more…
Are luxury watches a good investment?
The word “investment” can mean many things. There’s emotional investment and financial investment. Both can be simplified down to “putting time or money into something in hopes that there will be a greater return”.
When it comes to material goods and self-image, you may invest in your skills, appearance, and emotions…all of which can cost time and/or money.
When it comes to riches, you invest your money (and often your time) into something with the idea that the asset will provide future income or profit.
In the case of luxury watches, we can say without a shadow of a doubt that they are a good emotional investment. If you like the watch, it will make you feel good to wear it. Watches create a strong personal connection that not a lot of products can match…
That said, when people ask, “are watches a good investment?”, we automatically assume they mean monetarily. So, we are looking at this question today from a financial aspect.
The simple answer is yes. The not-so-simple answer is, it depends. Let us give you a few examples that make it clear that watches can be and have been a good investment on countless occasions, whether they were bought for that reason or not. Then we will get into what makes a watch a good investment and what are the best watch investments in 2020.
Examples of great watch investments
When looking at a watch’s value, it really comes down to market demand and if someone is actually willing to buy it. You can speculate what a watch is worth, pretty accurately if you know what you are doing, but it is only really worth something if there is a buyer. It’s not like stocks where you can liquidate your asset at any time. Of course, this is the case with many assets, such as houses. The difference with watches being it is a collector’s item, they sell at auctions so prices can be potentially worth more or less than expected, and the demand for specific models can change.
However, thanks to social media, there is less ambiguity in the value of specific watches. It is easier than ever to quantify and rate a watch. Moreover, the spreading of information and admiration for watches and specific brands – especially vintage and limited edition pieces from certain top brands like Rolex and Omega – has lead to a major jump in resale value. There’s simply more demand than ever for high end luxury watches, especially when looking to markets outside of USA, like China and Arabian countries. Ergo, a watch is a good investment, and investing in a watch has never been better.
Over the last decade, we’ve seen many watches spike in value. With vintage Rolex watches being the most prominent.
Now, let’s have a look at a few high end luxury watch examples that have turned out to be incredible investments.
You are about to read about a few examples of watches selling for truly exorbitant prices, some increasing in value by more than 3,000% in just a 7 year timeframe and other vintage watches that cost merely a few hundred bucks back in the 80s selling for millions of dollars at auctions in recent years.
- Heuer Autavia 2446: Bought for $7,000 in 2010. Resold at an auction in 2017 for $200,000. This isn’t the only case for Autavia. Another one sold last year for $125,000 at auction.
- Omega Speedmaster Broad Arrow – First of its kind: Sold for $275,000 at auction
- Omega Tourbillon – A prototype: Sold for 1.5 million at auction, which was nearly 15 times more than expected.
- Paul Newman Daytona: Bought for $200 in 1984. Sold for $18 million at auction in 2017.
These are but a few examples of the most insane auction sales. More often than not, you see watches increasing in value over a decade or so by 50-200%, not thousands of percent.
You can expect a watch from the most sought after brands to lose value after purchasing it and then regain its initial value within 5 years. From there, it is likely to increase steadily. If demand changes it could end up being a lot more or hover at its original value. This is, of course, typically speaking…and, in some cases a watch can drop in value and become unsellable, no longer any demand, at least for a certain time period or until someone is willing to buy it.
Hindsight is 20/20, but with the wisdom of it, Foresight is much clearer
Many watches have sold for insane amounts with the original buyer having no clue that in later years the watch would be worth so much. We are sure Paul Newman’s wife didn’t expect the watch would be worth millions of dollars a few decades after purchasing it, and it wouldn’t have been if she hadn’t given it to Paul Newman. The point is, sometimes, certain watches (even poor sellers) end up becoming the most sought after watches. If you keep a watch from a good brand in good condition with the box and papers safe, you never know what it could be worth someday.
That said, with a good understanding of what has made a watch of the past rise in value, you can make smart decisions on the right watch investment.
There are a few things to consider:
- The Brand
- Production Numbers
- Limited Editions
- Nuances (small changes in design within the same model/reference)
The above may seem obvious, if it comes from a popular brand and the production numbers are low, it stands a greater chance of increasing in value. But that still doesn’t determine its future demand. So, some of your watch investment is still guesswork.
To make an educated watch investment, follow the below information and advice…
Top 5 Watch Brands That Hold Value Best:
The following watch brands are best at holding their value and have the best chance of having models/references that will increase in value:
- Rolex (By Far The Best Watch Brand For Investment – Rolex Sports Watches are like GOLD – literally, they can be sold anywhere in the world almost instantly).
- Patek Philippe
- Audemars Piguet
- Omega (specific collections)
- Jaeger-LeCoultre & Vacheron Constantin (tie for 5th place)
Bonus: Richard Mille is easily the hottest watch brand in the game right now. This “new” brand will likely see some insane sales prices at future auctions. The thing is, Richard Mille watches sell at MSRP for insane amounts as is. So, we won’t include them in our “best watches to invest in”. We are trying to keep this to watches that can be purchased for less than $100K, and ideally, the $10-25K range.
Top 5 Watch Models That Likely Will Increase in Value:
These are watch models that have shown to increase in value steadily. So, whether new or used and the production run has ended, these watches will give you the best chance of your timepiece doubling as a real investment:
- Rolex Submariner
- Stainless Steel Rolex Daytona
- Patek Philippe 5711 (especially in Stainless Steel)
- Audemars Piguet Royal Oak Jumbo
- Omega Seamaster 300
Typically speaking, original models in stainless steel are the most sought after watches. So they make for the best watch investments.
With this in mind, Rolex’s newest line of watches, Rolex Sky-Dweller, is likely to be a great investment. This collection was launched in 2012 and there has been more hysteria over the collection with each year. We expect original Sky-Dwellers will be some of the best investments in 2020.
5 Smart Watch Investments in 2020
- Rolex Sky-Dweller Rolesor
- Rolex Batman 126710 & Rolex Pepsi 126710 (tie for these two highly coveted GMT-Master II’s)
- Patek Philippe Aquanaut (reference 4960 and reference 5167A)
- Audemars Piguet Royal Oak 25860ST
- Rolex Milgauss GV
What to consider when investing in watches?
Only about 20% of all luxury watches end up being a profitable investment. If you want to purchase a watch that lands in that 20%, there are a few things you want to consider.
Here are a few points to take note of when buying a watch that doubles as an investment. We will list them out to make things simple to digest…
- Brand: The brand of watch is vital. High-end Swiss watch brands are the most attractive and popular worldwide. However, not all Swiss watch brands are created equal. Rolex is by far the brand with the best resale value, then Patek Philippe and Audemars Piguet. Other brands that are also more likely to be a good investment are Omega, Tag Heuer, A. Lange & Söhne, Vacheron Constantin, Breitling, IWC, Franck Muller, Bell & Ross. There are of course more but these are some of the best watches for investment. Rolex being KING. One more thing to note – Most of these brands will remain strong in the future as they have proven themselves through a long history. These brands have been around for a long time. That said, market share does change. While Rolex, Patek Philippe and Audemars Piguet has steadily increased, brands like Breitling and IWC have slightly decreased, as a whole (although some models remain popular and sought after). The point is, try to consider trend developments. Go for the watch brand that is consistent and has good marketing activities (sorry Vacheron… but they are a good example of a classic brand that doesn’t have a strong marketing presence).
- Production Numbers: If the watch is a limited production run from a top brand, your chances are much higher that the value will rise. Things like changes in design (for example – the Rolex 1675 made a small change to the dial back when they were producing them. The model was the same but there was a small nuance in the Arabic numerals. This small changes has made the original design more rare which in turn made the original dial version rise in value when compared to the then-updated version). These are small nuances to pay attention to. Scarcity is key in watch investments.
- First of its Kind: If you can get your hands on a new model or prototype, it has a greater chance of being a profitable investment. Even if the model bombs with sales when new, it may be sought after in the future. This has happened so many times with Rolex watches. They are released and receive a poor response. Then they stop production as sales are low. 10-20 years later it becomes one of the most coveted watches as the appreciation for the watch or its rareness catches up.
- Proven Models: Some models have proven themselves over the years. Rolex Daytona watches are the perfect example of this. As are Rolex Submariners, Patek Philippe Nautilus, and AP Royal Oak and Royal Oak Offshores. These are safe bets. There are more, so do your research.
- Stainless Steel Sports Watches: Stainless steel is the classic and most popular metal for sports watches. Most of the most popular and coveted models from Rolex, Patek Philippe and Audemars Pigeut are the stainless steel versions. For investment purposes, if you had to choose between a stainless steel version or gold, we’d say go steel. The Daytona is the perfect example. A stainless steel Daytona will sell as quickly as you put it up for sale. A gold version may take some time. Watch collectors simply love stainless steel sports watches.
Tips for retaining value:
- Keep your watch in good condition (that doesn’t mean you can’t wear it!)
- Keep the original box and papers safe and sound. If you want to resell it someday, this is going to be a crucial part of the sale.
- No aftermarket changes and customizations. Leave your watch alone if you want it to retain value. Watches that have had customizations are almost guaranteed to lose value, even if they are set with tons of diamonds. Watch collectors want a completely original, everything-factory watch.
- Thanks to more and more online sellers, you can gauge the prices online. That way you can buy the watch at a fair price. Be a smart investor. This one is pretty obvious of course.
New vs Used
In the watch world, many times second hand watches make for great investments. When buying new, you lose value initially, and it takes years before the value creeps back up. With used watches, the initial loss has already been taken by the original buyer, so your watch won’t lose any value from there and will only potentially increase. We highly recommend considering purchasing a used watch if resale value is of importance to you. Just make sure it has its original parts, it’s in good condition, and you get a fair price from the seller.
Where to Buy Luxury Watches?
If you want to invest in a luxury watch, you need a trustworthy, reliable place to buy watches from, like Diamonds By Raymond Lee in Boca Raton.
Not only will you be able to get a good price, but a good source will be able to give you insider information on the best and most exclusive watches coming out or that they just acquired. Of course, sellers know watches are investments too, so you need to get in good with the seller to get good deals. The more watches you buy and the more you build your relationship, the better chance you will have for access to the best watch investments.
At Diamonds By Raymond Lee, we are watch experts. We have access to the best and hardest to come by watches. What’s more, we are always open to making new relationships with serious watch collectors.
Feel free to contact us.
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