Watches mean far more to many people than just a device to tell the time with. Unlike most items out there, people make close connections and bonds with watches for personal reasons.
You may not think about watches every day but they are a big part of our lives. They are wonderfully functional, fashionable, and often hold an emotional value for their owners.
A watch can be a special gift or a treasured family heirloom passed down the generations. And, of course, they look great on your wrist. As well as their emotional significance, watches can hold real value. That is why many people consider investing in watches.
When investing in anything, you need to consider the amount of money you’re willing to spend and how strong your connection is to the timepiece.
If you have some hard-earned cash lying around, investing in something can be a great idea. But, the question remains – are watches a good investment?
Well, the answer isn’t as straightforward as you may think. But, we are here to guide you through the pros and cons of investing in watches.
Continue reading as we discuss various types of watch investments and what these can mean for you as a potential investor or buyer.
Investing In a Timepiece
The watch industry has experienced a significant increase in the number of inverters looking to make money through selling and buying watches over recent years. Most of these sales have been at high-profile auctions.
Some watches make astronomical sums of money such as the Rolex Daytona owned by Paul Newman. In 2017, this watch sold at auction for an eye-watering $17.75 million. Of course, this is not the case for all watches and is an exceptional example of watch investment.
Not every watch sold at auction will necessarily appreciate in value. Only a handful of watches will double or triple in price in a short amount of time.
The estimated prices of many watches tend to be based on the hype around them and if a significant figure in society has owned it.
Most watches that are sold for gargantuan sums of money usually have a story behind them. For instance, they may have been owned by a celebrity or are one of a kind.
For the most expensive watches, only a few very rich individuals with good connections can afford to invest in them. As they say “it’s all about who you know.”
Aside from money, investors can make an emotional connection to their watches as well. Such connections help make the watch industry unique. You can’t get emotional attachments to different funds or stocks and shares.
Watches can carry sentimental value making them less susceptible to the ups and downs that are so common in the economic market.
Because the financial market has little to no effect on nostalgia, it becomes advantageous to invest in certain watches. Think of vintage watches that are limited in numbers.
Collectors and investors are less likely to sell their watch in times of economic panic and crisis. Instead, the watch will not be affected and continue to grow in value.
Factors That Influence The Value Of A Watch Investment
There are a few factors to consider when thinking of investing in watches. These include:
Supply and demand
How many have been made
The brand
Materials used in construction
The condition
The model of the watch
Supply And Demand
As with stock prices, the value of watches depends on supply and demand.
When it comes to luxury watches, being able to sell them tends to come down to the market’s demand at that time and, of course, if someone is willing to buy the watch.
Watches are a collector’s item and the market is quite a niche. Unlike stocks, you cannot liquidate your assets with a watch.
However, there may be a higher demand and interest in one particular model of the watch over others. Depending on the watch you own, it may be worth more or less than you first expected.
How Many Have Been Made
While supply and demand have a significant impact on the value of a watch, another factor that has a large influence is the number of models that were produced.
If your watch is from a popular brand and only a few were made, it has a better chance of increasing in value. Whether or not the watch has been discontinued also affects the potential price.
Limited editions or models with unique characteristics are also more likely to rise in price. Rare and special qualities with some watches are what set them apart from others.
Even if another watch is an established model with a reliable history, it may not be unique enough to warrant investment.
Inspect watches for tiny details and minor changes. These can significantly increase the value of a watch.
Take the Rolex ‘red’ Submariner, for example. This simply sports the ‘Submariner’ text in red lettering but adds a higher value to the timepiece than those without this text.
The Brand
It goes without saying but the brand of the watch matters a lot. The most popular models for investors tend to be luxury Swiss brands as they have the best resale value.
Rolex is another famous brand that has one of the best resale values. Other examples include Audemars Piguet and Patek Philippe.
There are many luxury watch brands on the market but you should always do your research before purchasing one. However, the majority of luxury Swiss watch brands are usually good investments.
Materials Used In Construction
Many people believe that gold luxury watches have the best resale value but liquidating these assets can be difficult. This is because it is simply an acquired taste.
Therefore, these watches can be harder to sell as they are not as popular as some other brands and not in such high demand.
Perhaps surprisingly, stainless steel sports watches are a popular choice. Ask many watch collectors and they will have a number of these models in their possession.
Unsurprisingly, the most popular and most desirable watches tend to be Rolex, Audemars Piguet, and Patek Philippe stainless steel watches.
If you’re looking to invest in a watch for its resale value alone, we recommend considering stainless steel models over gold watches.
The Condition
The condition of the watch is vital. This can have a very large impact on the resale value of the timepiece. If it is heavily worn or damaged, the overall value can drop significantly. Even the slightest imperfections can have a negative effect on the price.
The better condition a watch is in, the higher its resale price will be.
The Model Of The Watch
This links in with supply and demand again. The model of a watch is what most collectors and investors first look at.
Over the years, certain watch models have proven to be the most valuable and popular. Examples include:
Rolex Daytona
Rolex Submariner
Patek Philippe Nautilus
Audemars Piguet Royal Oak
Audemars Piguet Royal Oak Offshores
Other examples of popular models include luxury sports watches. As we mentioned earlier, these typically have the best resale values as well.
As with most things in life, the level of popularity equals the amount of demand. The higher the demand is for a watch, the higher the resale value will be, especially if there is a small supply of the model.
So, Should You Invest In Watches?
The value of a commodity, such as watches, is usually dependent on supply and demand. The more popular the model or brand of watch is, the higher its demand will be.
As for production numbers, the lower these are, the rarer the model. In turn, the rarer the watch, the smaller the supply is and the higher its demand will be.
The most popular models are typically easier to liquidate when compared to lesser-known brands and models. The material of the watch also affects the resale value.
If it is made from a popular material, such as stainless steel, then it will be easier to sell. If it is in good condition, its value will also be higher.
When it comes to investing in watches, it’s all about time. It will take a while to understand what to look for in a top-quality watch. And, even if it is high-quality, it may not be popular enough to sell for an increased price.
Although watches can increase in value over time, it doesn’t mean they always will. Unfortunately, there is no crystal ball or formula to predict the future value of a watch. If there was, we would all be investing in watches!
If you have decided to invest in your first watch, whether it’s for personal use or as a collector’s item, you should do your research first. If you want to resell it for a higher price in the future, ensure that you consider all of our points above so you are not disappointed.
The best thing about investing in watches is, even if the price doesn’t increase a great deal, you still get to wear a highly fashionable and stylish timepiece for years to come.
Hi, my name is Matt Roberts, and I have been a financial analyst and advisor for the past 7 years.
While my job is based within the money industry, in my spare time I enjoy looking into potential new investment opportunities. From cryptocurrencies, to purchasing vintage cars, everything has the potential to gain you money if you are wise and make the correct investment decisions.
Through this site, I hope to educate others on investing in general, and hope to provide others with useful information that can benefit them and the opportunities they have. If you are not confident with finances, investing money can be a daunting step, however, it is a lot easier than many people are led to believe.
