IS A LUXURY WATCH A GOOD INVESTMENT?

In 2022, a report by Business Insider revealed a startling fact: Rolex watches had surpassed gold, real estate, and stocks in terms of investment performance over the past decade. This revelation sent shockwaves through the investment world, solidifying watches as a viable asset class.

Fast forward to 2024, and the trend continues to hold strong. According to statistics, the global market for luxury watches has soared to a valuation of 46.3 billion USD this year. Projections suggest a substantial surge over the next decade, with estimates pointing towards a climb to 77.3 billion USD by 2033.

With each passing year, more and more individuals are flocking to purchase luxury watches for investment purposes. If you, like millions of other savvy investors, are itching to diversify your portfolio and are considering watches as your next venture, I hear you! But hold your horses, my friend. Investing in watches isn’t exactly a walk in the park.

First off, there are hundreds of watch brands vying for your attention, with heavy hitters like Rolex, Patek Philippe, and Omega leading the pack. And within each of these brands? A labyrinth of collections, sub-collections, models, and variations awaits you, each boasting its unique allure. So, it’s not just about choosing a brand but navigating through an intricate maze of options within the chosen brand.

Should you go for a Rolex, Omega, Longines, or Tudor as an investment? The choices are endless, and the stakes are high. If you think you can waltz into this arena without a game plan, you’re in for a rude awakening. You might as well light your cash on fire and watch it smoke. Need guidance? Well, you’re in luck. Join us as we dissect the pivotal question: Is a watch a sound investment choice?

Eight reasons why investing in a luxury watch pays off

1. Watches hold their value over time, often appreciating in worth as they age, unlike many other luxury items
2. They offer tangible assets that you can physically hold and enjoy, adding a sense of satisfaction beyond just monetary gain.
3. Unlike stocks or bonds, watches don’t require constant monitoring or management, making them a relatively passive investment.
4. Watches are portable and compact, making them easy to store and transport compared to other physical assets like real estate. Plus, you can “showcase your investment.”
5. They offer a hedge against inflation, as their value tends to rise over time, keeping pace with or outpacing inflation rates.
6. They have the potential to become family heirlooms, passed down from generation to generation, increasing in sentimental and monetary value.
7. Watches are a global commodity, with demand from collectors and enthusiasts worldwide.
8. Watches offer the potential for high returns on investment, particularly for rare or limited-edition pieces. They are relatively immune to market fluctuations and economic downturns, maintaining their value even in uncertain times.

8 reasons why investing in a luxury watch may not pay off

1. Watches are not as liquid as stocks or bonds, meaning it can take time to find a buyer and convert them into cash when needed.
2. The value of watches can fluctuate based on market trends, economic conditions, and shifts in consumer preferences, leading to potential losses.
3. Properly storing and maintaining a luxury watch collection can incur additional expenses, such as insurance, safekeeping, and servicing costs.
4. Watches are vulnerable to theft, loss, and damage, especially if not adequately secured or insured, leading to financial setbacks.
5. Successfully investing in watches requires in-depth market knowledge, including brands, models, and historical performance, which can be time-consuming and challenging.
6. Investing in watches from lesser-known brands or emerging markets carries higher risk, as their value may be more susceptible to fluctuations and market sentiment.
7. The funds tied up in a luxury watch collection could be invested elsewhere for potentially higher returns, leading to missed opportunities for diversification and growth.
8. Access to certain exclusive or limited-edition watches may be restricted, limiting investment opportunities for individuals outside of select networks or circles

Top ten watch brands for secure investments: Expert picks for timeless returns

• Patek Philippe: Ever heard of the “Holy Trinity of Watches?” Patek Philippe is one-third of this revered trio, alongside Audemars Piguet and Vacheron Constantin. Founded in 1839, Patek Philippe has a storied history of crafting exceptional timepieces, with each watch requiring months of meticulous handcrafting. Fun fact: Patek Philippe watches often have waitlists stretching up to 10 years!
• Audemars Piguet: As one of the “Big Three” Swiss watchmakers, Audemars Piguet stands at the pinnacle of haute horlogerie. Established in 1875, Audemars Piguet is renowned for its daring designs and technical mastery. Fun fact: The Royal Oak, introduced in 1972, was the world’s first luxury sports watch and revolutionized the industry with its octagonal bezel and integrated bracelet. With limited production and a cult following, Audemar Piguet watches are coveted by collectors and investors alike.
• Vacheron Constantin: Dating back to 1755, Vacheron Constantin is the oldest continuously operating watch manufacturer in the world. Fun fact: Vacheron Constantin has a storied clientele that includes historical figures such as Napoleon Bonaparte and Harry Truman.
• Rolex: Founded in 1905, Rolex is arguably the most recognizable luxury watch brand globally. Its watches are among the most sought-after luxury timepieces in the world and are considered blue-chip investments in the world of horology.

• A. Lange & Söhne: Hailing from Germany, A. Lange & Söhne epitomizes the pinnacle of German watchmaking excellence. Established in 1845, A. Lange & Söhne watches are prized possessions for discerning collectors. Fun fact: Each A. Lange & Söhne watch undergoes meticulous hand-finishing, with some models requiring months of labor to complete.
• Jaeger-LeCoultre: With a legacy spanning over 180 years, Jaeger-LeCoultre is a powerhouse of horological innovation. Founded in 1833, Jaeger-LeCoultre has pioneered countless inventions, including the world’s thinnest movement and the iconic Reverso watch. Fun fact: The Reverso was originally designed for polo players, featuring a reversible case to protect the watch crystal during matches.
• Omega: As the official timekeeper of the Olympic Games and the first watch worn on the moon, Omega has solidified its place in horological history. Established in 1848, Omega has a legacy of precision and innovation, with iconic models like the Speedmaster and Seamaster capturing the imagination of watch enthusiasts worldwide. Fun fact: The Omega Speedmaster Professional was selected by NASA for all manned space missions and earned the nickname “Moonwatch” after being worn by astronauts during the Apollo missions.

• Breguet: Founded in 1775 by Abraham-Louis Breguet, Breguet watches are renowned for their technical prowess, with inventions such as the tourbillon and the Breguet overcoil spring revolutionizing watchmaking. Fun fact: Breguet timepieces have graced the wrists of historical figures such as Napoleon Bonaparte, Marie Antoinette, and Winston Churchill.
• Richard Mille: In the world of haute horlogerie, Richard Mille stands out as a pioneer of innovation and avant-garde design. Founded in 2001, Richard Mille has quickly established itself as a disruptor in the luxury watch industry with groundbreaking materials and technical innovations. Richard Mille watches offer unique investment opportunities for those seeking exclusivity and innovation.
• Jacob & Co.: Bold, innovative, and unapologetically extravagant, Jacob & Co. has carved a niche in high-end watches and jewelry. Founded by Jacob Arabo in 1986, Jacob & Co. is renowned for its daring designs and use of rare gemstones and materials. Fun fact: Jacob & Co. is known for its elaborate complications, including the Astronomia, a mesmerizing timepiece with a rotating dial and floating tourbillon.

Top 10 tips for successful luxury watch investments

• Research, Research, Research. Understand the history, trends, and market dynamics of different watch brands and models.
• Focus on established watchmakers with a track record of value appreciation.
• Set a clear budget for your watch investments and stick to it.
• Keep an eye out for limited edition releases and special collaborations. These watches often have higher investment potential due to their exclusivity and collectibility.
• Please familiarize yourself with watch complications and their significance in the market. Complications such as tourbillons, perpetual calendars, and moon phases can add value to a watch.
• Forge relationships with authorized dealers and boutique shops. They can provide valuable insights, access to exclusive releases, and potential investment opportunities.
• Pay attention to watches with historical significance or provenance.
• Stay updated on market trends, industry news, and emerging brands.
• Take a long-term view of your watch investments. While some watches may appreciate quickly, others may take years to reach their full potential.
• Monitor auction results to gauge the market value of different watch brands and models.

Bonus tip: Spread your investments across different brands, models, and price points. Diversification helps mitigate risk and ensures a balanced portfolio.

In conclusion, the answer to whether a watch is a good investment is both “yes” and “no.”Yes, if you’re passionate about horology and willing to do the necessary groundwork. No, if you’re solely looking for quick financial gains or expect guaranteed returns. Watches, like any investment, come with risks, including market fluctuations, unexpected expenses, and the subjective nature of value. For those who are willing to roll up their sleeves and put in the effort, watches can certainly prove to be a rewarding investment avenue.

Top image: A. Lange & Sohne Datograph Perpetual Tourbillon Honeygold Watches and Wonders 2024 release