Investing in Luxury Watches: What Makes a Watch a Good Investment?

To the watch lover reading this, do you like having your cake & eating it too? What we mean by that is having the ability to own & wear beautiful timepieces & then flipping them for a nice profit down the road. Well, for some watches, you certainly can.

If the above interests you, continue reading.

 

Luxury watches that are suitable for investments

Unfortunately, not all watch brands & watches are made equal. As such, you must be discerning in your watch purchase decisions should investing for future profits be a consideration for you.

So, what are the watches that are known to have the greatest investment potential? Any guesses?

Watches in high demand from established & popular brands generally tend to hold their value or even appreciate over time. Brands such as Rolex, Omega, Patek Philippe & Audemars Piguet fit these criteria. Due to the demand for them which far outstrips their supply, popular pieces tend to immediately appreciate once they leave the boutique & are sold on the secondary market.

For example, a Rolex Submariner Date ‘Hulk’ which has a retail price of SGD$14,690 is currently being sold on the secondary market for upwards of SGD$30,000. That’s an astounding 104% increase in value!

Rolex Submariner Hulk

Other popular models that come to mind include but are not limited to the Rolex Daytona, Omega Speedmaster, Patek Philippe Nautilus and the Audemars Piguet Royal Oak. Do note that there are many different variations within each of these models & each will fare differently on the secondary markets based on factors such as appearance, popularity and scarcity.

So if watches are such a great investment then why doesn’t everybody just waltz into their nearest boutique & grab one? The simple answer is…you can’t.

The extremely low supply vs extremely high demand makes it such that only the brand’s most loyal VIP customers who have spent a significant amount of money with them are allocated the opportunity to purchase their popular models at retail price and even then, the waiting list might span a couple of years. It’s exactly because of this that watch lovers are willing to fork out more than double the retail price to purchase their desired watch on the secondary market.

In certain circumstances, buying a watch on the secondary market above its retail price can be profitable in the long term as well. For example, the Patek Philippe Nautilus which had a secondary market average price of about SGD$68,000 in 2018 is currently going for upwards of SGD$200,000 in 2022, a whopping 194% increase in value over 4 years.

Patek Philippe Nautilus | Source: Shutterstock

Do note that this is not always the case & purchasing watches on the secondary market for a sizeable premium over retail price is generally riskier.

 

Factors that affect secondary market value

With a speculative investment like watches where there must be a willing buyer for your piece, many factors affect the price of each individual watch even though they might be of the same model.

Popularity

Popularity in terms of brand and model are important as the higher the demand is, the more likely the watch will appreciate over time.

Scarcity

Simple economics tell us that a low supply with a high demand equates to a higher price. Such is the case with watches.

For reference, Rolex manufactures approximately 1 million watches per year & Patek Philippe manufactures approximately 60,000 watches per year.

Famous Associations

Certain watches have skyrocketed in value due to the famous associations made to them.

One example is the Rolex Daytona ‘Paul Newman’ which was named after the American actor & race car driver who was frequently spotted wearing that variation of the Rolex Daytona. His personal piece set a record at auction when it was sold for more than US$17 million. Currently, other ‘Paul Newman’ Daytonas go from anywhere between a few hundred thousand to above a million dollars.

Rolex Daytona 'Paul Newman' & Paul Newman | Source: Pinterest

Age

In the world of watches, some pieces which have attained a vintage status have sharply increased in value due to the lower supply of these older pieces.

This is not always the case though and is a riskier play if you’re considering purchasing a watch now to hold it for a long period of time due to the possibility of changed market sentiments & trends in the future.

Condition

As with every physical item, the better its condition, the higher its value. The same can be said for watches and you can expect a higher valuation if your watch is kept in mint condition.

However, don’t let that spoil the fun of owning watches! Watches are made to be worn; you just have to manage your expectations in terms of future value if you decide to use it daily. 

Accessories

Having the full set of accessories that came with your watch when initially purchased will do wonders for its value. These include its original box, authenticity documents, invoices, etc.,

 

Where to buy watches on the secondary market

With watches being as valuable as they are, there are bound to be counterfeits being sold as authentic pieces. As such, it’s advisable to only purchase from trusted sources.

One such company you may consider purchasing from is MoneyMax Jewellery, a trusted & listed company where we guarantee the authenticity of the watches that we have for sale.

Other options include marketplaces such as Carousell where both companies & individuals have their watches listed for sale. (PS we’re on Carousell as well.)

When purchasing from individual sellers, you may request for an authenticity check to be conducted by a trusted company that provides authentication services, usually at the cost of the buyer.

 

Final thoughts

Watches are beautiful pieces of machinery that coincidentally tell the time. Having the added bonus of knowing that the timepiece on your wrist is increasing in value over time makes it that much more beautiful.

All in all, investing in luxury watches requires due diligence when researching for your next purchase if your goal is to make a profit off of them in the future.

No matter your purchase motivations, we hope you enjoy the watchkeeping journey & if years down the road your watch increases in value, congratulations!

 

*Disclaimer: This article does not constitute as financial advice & only reflects the views of the author.