Is a Luxury Watch a Good Investment?

If you already think you know everything there is to know about luxury watches, this article might change your opinion. With this guide, we’re going to explore the investment side of luxury watch collecting. In doing so, we hope it gives you plenty of food for thought and some inspiration by way of helping you decide on your next collectable timepiece.

Buying watches purely for investment can raise a few eyebrows. If you only focus on buying watches to make money out of them, you’re kind of missing the point. There is a lot of enjoyment to be had in collecting luxury timepieces. It almost seems a great shame to overlook that. On the flip side, buying watches without any knowledge or consideration of the future value of that watch can be pretty irresponsible.

When it comes to luxury watches, some of them can hold their value really well. Others can appreciate over time, but that doesn’t mean a collector can’t be both passionate about luxury timepieces and also want to invest in a watch as an asset. You can invest financially and emotionally in a watch. It’s all part of the fun.

Here’s a bit of perspective for you. The preowned market is growing by about 8-9% every year. The primary watch market is growing by just 1%. Why so? And why are watches becoming more expensive? Well, a growing consumer demand for luxury wristwatches results in a rise in price and increased trading activity. That’s great news for you if you already own one or multiple luxury watches. The preowned market is booming right now. Watch lovers and speculators alike are starting to consider collecting timepieces as investments, but it’s not quite as easy as it sounds. Not every luxury watch holds its value well. In this article, we’re going to look at why some brands are a better bet than others.

What Are the Reasons for Investing in a Watch?

Typically, there are three key reasons you may want to invest in a watch. Firstly, some can increase in value. There are various reasons why a watch would do this. We’re going to look at them a little further down. Secondly, it helps to have a passion for horology. Many walk into watch collecting for investment reasons only and soon realise it can become quite a niche and interesting hobby. If you’re already into collecting watches – making money from them is a bonus. Thirdly, it helps to be diverse when investing in assets that you can enjoy owning. Collecting timepieces is a great way to diversify your portfolio.

What Return Can I Expect From Collecting Watches

This is where the subject becomes more complicated. The majority of new watches will lose their value the moment you take them out of the box and put them on your wrist. Only a handful of exquisite timepieces have got what it takes to appreciate. It’s all down to the brand that manufactures the watch, the quality of its materials and the desirability of the model. In many circumstances, it is impossible to predict which way the market will go. But some iconic watches on the new and pre-owned market have proved instantly successful from the get-go. Being successful as a watch investor is all about doing your research, knowing what to look for on the market, and spotting the chance to buy and sell at just the right time.

When talking about the return of a luxury watch investment, there are three things to look at. One is the recommended retail price. The retail prices of new luxury watches is on the increase. During the year of the pandemic for example, Rolex increased its prices by 7%. When a high-end brand does this, it usually results in the discontinuation of other models within that line and the price of this discontinued model tends to shoot up on the pre-owned market.

Secondly, consider retail prices vs secondary prices. Often, you hear people talk about the price of a watch doubling overnight. This may refer to a watch in high demand. In many circumstances, brands like Rolex, Audemars Piguet or Patek Philippe will add a newly anticipated watch to an already iconic line. Watch enthusiasts will be waiting eagerly to own one, but brands produce these watches in limited numbers to keep demand high. A brand new Daytona watch, for example, may retail for a reasonable price when new, but due to a huge waiting list, may sell for triple that on the pre-owned market.

Thirdly, not every watch from a renowned brand will soar in price. Only a select few do well. The factors that play a role in this include its rarity and the likelihood of that model becoming discontinued. Some brands are renowned for discontinuing watches that are in high demand. An example would be some Daytona watches from Rolex, which have risen by 60% over the last three years and the Nautilus from Patek Philippe, which had increased by a staggering 150%.

What Should I Know Before Buying a Watch as an Investment?

As mentioned earlier, some factors affect how a watch performs in the preowned market. You should consider these first if you’re looking to buy a watch that will hold its value and return a good investment. The factors to consider include the brand itself. Brand provenance is important in watch investment. It must be widely known within the industry and have a good reputation for crafting authentic, genuine and unique designs. Those brands operating with vertical integration do well. In-house components, materials and movements are favoured over mass-produced watches built from parts that are sourced from third parties. Models that have been released in a limited run are also more desirable. Lastly, the watch must be interesting in terms of Innovation or technical solutions.

To ensure you are meeting the requirements for a solid investment, you should consult an industry specialist. Here at Charles Martin, we have a team of knowledgeable experts who can guide you through the process of understanding the current state of affairs in the watch market. Ensuring that you keep the watch’s original box and paperwork will ensure your return is good. The same can be said for your receipt of purchase and the watch’s warranty card.

If you’re a true watch enthusiast and you plan to enjoy and wear your investment for many years to come, ensure that you get it serviced and cleaned when needed and that you look after it, storing it safely in a watch case or watch winder once removed from the wrist. It is always advisable to take your watch to an official, registered service centre like ours. Our team is experienced and knows how to deal with your timepiece and how to handle it with the respect it deserves.

Brands That Hold Their Value

It makes sense to talk a little about the brands that hold their value well in the industry. If you are looking to invest in a luxury timepiece and are undecided on which brand to opt for, you may find this section of the article particularly useful.

Omega

As with anything, the law of supply and demand greatly affects the price of the item you want to buy. When there is more product made, it becomes more accessible. When there is a limited supply of a product, it becomes more in demand and more expensive. Answering the question; "do Omega watches hold their value?" depends on several factors. Limited editions and antique versions of Omega watches do better than others. Some models of the Omega Speedmaster Moonwatch Professional are highly sought-after on the pre-owned market, particularly the original 1957 variant, which sold at auction for a whopping $3.4 million, and a rare 1992 skeletonized version of the Speedmaster.

Rolex

Rolex is the most recognized luxury watch brand out there and it is common knowledge that these watches hold their value significantly well. You can pretty much choose any Rolex watch from the brand’s catalogue, safe in the knowledge that even if it doesn’t appreciate in value, it will at least hold its value well. Rolex watches have become a popular investment for many a collector. Rolex is a highly respected brand with a long history of producing exceptionally well-crafted timepieces.

The quality of a timepiece from this manufacturer, along with style and brand provenance, all influence the investment side of owning a Rolex watch. The most popular include the Submariner and the Daytona. Rolex is known for producing several versions of an iconic watch. Produced for a limited time and then discontinued, they become highly sought after on the pre-owned market. Rolex produces watches made from its own proprietary materials and crafts its own gold. That said, its conventional steel models are some of the most expensive and desirable of all.

Tudor

Tudor is the little sister to industry-giant Rolex, so it goes without saying that many enthusiasts deem Tudor watches to be incredibly well-built and worthy of an investment. The brand borrows materials and manufacturing methods from Rolex, adapting these into its designs but at a more affordable price. Saying that, some Tudor watches can certainly hold their value well on the pre-owned market, particularly those from the Black Bay series. Its neo-vintage style is admired by lovers of the classic dive watch and the brand has released several versions of the watch to choose from. Above all, Tudor is a brand that makes great watches for wearing every day. Built solidly from robust materials, every model in this collection holds a good level of value, even if its watches don’t appreciate in the same way as Rolex watches do.

Breitling

Breitling watches hold their value well over time and even those that tend to lose some will take many years to do so. Many enthusiasts turn to Breitling for its beautiful chronograph designs. Models like the Breitling Top Time watches with a recognisable bow-tie design on a bi-compax dial layout are considered popular collectables. So too are Chronomat watches, developed with instantly recognisable rider tabs on the bezel and a specially manufactured Rouleaux bracelet for the series.

Conclusion

All-in-all there are pros and cons to investing in a luxury watch, but the good far outweighs the bad. A luxury watch is both a portable asset and a functional accessory. You can take a watch wherever you go and wear it whenever you want, storing it in a safe place when you’re not wearing it. Collecting watches can also become a profitable hobby. It is thought that generally speaking, watches that retail for over £100,000 appreciate by about 69% every decade.

Another good thing about investing in luxury watches is that timepieces do not correlate with the stock market. They’re also more stable during an economic crisis, provided you pick the right design.

Remember, the key things to look out for when deciding on a luxury watch as an investment include scarcity, authenticity, age, condition, brand and trends. To help provide some more clarity on these factors, it’s recommended that you research the market thoroughly and speak to experts like us at Charles Martin Watch Company. Here, our team of watch enthusiasts and specialists can guide you to finding your ultimate timepiece by showing you what’s on offer and helping assist with information about the current market.

You can call our store on (01902 860002) or email us on (info@charlesmartinwatchcompany.com). for more information on any of the brands we’ve featured in this article today. To explore our full range of pre-owned timepieces at Charles Martin, shop here. Alternatively, why not try a timepiece on for size in store by calling in to visit us. You can find us here.