Are Watches a Good Investment? (Pros & Cons + An Alternative)

by Elaine Lau

Watches are popular collectible items, but the topic of investing in watches is quite controversial. Some investors believe that the finest timepieces can offer lucrative returns, while others disagree.

So, are watches a good investment or not?

Let’s find out!

This article covers the pros and cons of investing in watches, the factors that determine the value of watches, tips on how to invest in watches, and 10 luxury watches to explore.

You’ll also discover how to invest in an alternative like fine wine through Vinovest.

Are Watches a Good Investment? (Pros and Cons)

If you’re considering becoming a watch collector, you must explore the pros and cons of investing in timepieces.

Let’s start with the benefits of watch investment:

The Advantages of Investing in Watches

A Portable Asset: A luxury watch is both a good investment and a portable asset. You can carry this collectible asset with you wherever you go or store it in any safe place.

A Potentially Profitable Hobby: The best investment watches appreciate in value over time (unlike other assets like luxury cars). This means you can wear your favorite sports watch daily and possibly sell it for a profit later. Interestingly, luxury watches that cost over $100,000 are expected to have an average value appreciation of about 69% after every decade.

Stable During Economic Crises: Watches have little to no correlation to the stock market. These assets usually outperform stocks and are usually more stable during economic downturns. For example, the value of luxury watches dropped only by 8% in 2022 during the COVID pandemic. Meanwhile, the S&P 500 stock index fell by 19%.

The Disadvantages of Investing in Watches

Lack of Liquidity and Unexpected Costs: It’s usually difficult to trade lesser-known watches on the secondary market. If you want to sell your watch at the best possible price, you might have to wait for months or years. And if a broker sells the timepiece on your behalf, you’ll have to pay hefty transaction fees.

Counterfeits: There are lots of counterfeit watches on the secondary market. This means you must thoroughly research the market before starting your watch investment journey (which can be time-consuming).

So, how do you identify a valuable watch?

6 Factors That Determine the Value of a Watch

Some of the factors that make a watch valuable are:

Scarcity
Authenticity
Brand
The Material of the Watch
Age and Condition
Fashion Trends and Design

1. Scarcity

A sought-after, limited edition timepiece is usually in high demand on the secondary market. That’s because watches (and other investment items) often appreciate in value when their demand outweighs the supply.

For instance, a limited edition Patek Philippe watch with the finest materials takes about eight years to be made. So, this timepiece is rare and expensive.

2. Authenticity

Always buy authentic watches if you want to get the best returns for your investment. And if you buy a used watch, ensure that any replacement parts used are genuine.

3. Brand

If you’re considering buying a timepiece for investment purposes, then you must pick your watch brand wisely. For example, famous brands that usually perform well include Rolex, Patek Philippe, and Omega.

You can also find high-quality watches from independent manufacturers like Philippe Dufour and F.P. Journe.

4. The Material of the Watch

Some watches are classified as “complicated” because they contain unusual features. These unique features include split-second timers, perpetual calendars, and ultra-flat faces.

Most of these timepieces are made using different materials, like stainless steel or titanium. Because of their unique traits, these watches are valuable and could be an excellent investment for any watch collector.

5. Age and Condition

New watches aren’t necessarily more investment-worthy than used ones. In fact, a vintage pre owned watch can be a good investment if it’s still in good condition.

Also, a well-known pre owned watch (like a Rolex Paul Newman Daytona vintage watch) will often make a great investment than a new timepiece from an unknown watch brand.

For example, a used, well-maintained Paul Newman Daytona reference 6239 watch made in 1968 sells for over a whopping $300,000 at auction houses like Sotheby’s.

6. Fashion Trends and Design

Design and fashion trends also play an important role in the value of a watch. For example, the value of a watch might increase if a celebrity wears it at a well-known fashion show or event.

But then the watch could lose value when it goes out of fashion or when a trend ends.

Now, how do you pick the right investment watch?

5 Sure-Fire Tips to Help You Start Investing in Watches

Here’s what you need to do before putting your money into the watch industry:

Study the Watch Market
Consider Your Budget and Investment Goals
Pick Brands With a High Resale Value
Decide Where to Buy and Sell Investment Watches
Arrange Proper Storage

1. Study the Watch Market

It’s not always easy to predict how watches will perform in the future. So, the best thing to do is study the luxury watch market and track the value of your desired timepiece.

Researching will also help you avoid buying counterfeit, poorly serviced, or stolen watches. To make things easier, consult a reputed dealer that’ll help you determine the authenticity and value of a watch.

2. Consider Your Budget and Investment Goals

Watches usually make good long term investments. This means they might not be the right assets for you if you have short term investment goals.

You should also consider your budget and invest in something you can afford. Also, consider investing in a timepiece you love so you can keep it if it loses value.

3. Pick Brands With a High Resale Value

Brands that have historically shown an increase in their resale value include Rolex, Patek Philippe, Audemars Piguet, and Omega. So, it’s often best to pick top-performing brands like them as compared to lesser known ones.

For example, the Rolex Daytona has an MSRP (manufacturer’s suggested retail price) of $13,150. But on the secondary market, this timepiece sells for around $40,000.

4. Decide Where to Buy and Sell Investment Watches

It’s usually best to buy a new, modern watch directly from the manufacturer. But if you’re looking for a used vintage watch, check out a reputed dealer like the European Watch Company.

Auction houses like Sotheby’s and Christie’s are also the best places to buy and sell investment watches. Additionally, you can also buy and sell timepieces on the pre owned market or sites like eBay and Chrono24.

5. Arrange Proper Storage

To protect your watch from corrosion and scratches, store it face up in a moisture-free location. Also, keep it away from direct sunlight, especially if it has genuine leather bands.

Some of the best places to store your timepiece include a watch box, watch pouch, watch roll, or a drawer. If you own automatic watches, store them in a watch winder so that they can keep functioning properly.

Let’s now discover the timepieces worth collecting.

The 10 Best Watches to Invest In

Some of the finest investment watches are:

Richard Mille RM UP-01 Ferrari
Rolex Submariner
Audemars Piguet Royal Oak Extra-Thin
Patek Philippe 5205G
Omega Speedmaster Professional Moonwatch
Rolex Daytona
Rolex Deepsea Sea-Dweller
Rolex GMT Master II
Omega Seamaster Diver 300M
Tudor Black Bay

1. Richard Mille RM UP-01 Ferrari ($1,888,000)

This Richard Mille luxury watch is ultra-thin (1.75 millimeters) and is crafted from grade 5 titanium. It’s one of the most expensive Richard Mille watches ever made — costing nearly $2 million.

Apparently, it’s the thinnest mechanical watch ever made. Also, only 150 Richard Mille RM UP-01 Ferrari watches are available worldwide.

2. Rolex Submariner ($95,010)

This Rolex watch was first released in 1953 and is the brand’s most recognized, iconic, and investment-worthy watch.

During its release, it was the first waterproof wristwatch to reach a depth of 330 feet (100 meters). Today, this sporty vintage Rolex watch can reach a depth of 1,000 feet (300 meters).

3. Audemars Piguet Royal Oak Extra-Thin ($86,471)

The Audemars Piguet Royal Oak Extra-Thin watch is protected by a flat sapphire crystal, and the dial offers a very fine-grained texture.

The date wheel of this expensive watch features a quick-set function, and the balance wheel has inertia blocks that help with shock-proofing.

4. Patek Philippe 5205G ($60,976)

This Patek Philippe watch boasts gold-plated hour markers, a white gold case, and a blue sunburst dial. It has three apertures on its arc, which display the day, date, and month.

The timepiece has a slightly concave bezel and delicately pierced strap lugs. It’s a waterproof luxury watch that can reach a depth of 98.4 feet (30 meters).

5. Omega Speedmaster Professional Moonwatch ($26,421)

This Omega Speedmaster watch is made from stainless steel and boasts an embossed Seahorse medallion on the case back. It has an asymmetrical case, a black dial, and an aluminum bezel ring.

6. Rolex Daytona ($21,673)

The Rolex Daytona is a sporty watch designed for racing drivers. In fact, the watch is named after the famous Daytona motor race in Florida, US.

The dial of this expensive watch has a bold tachymetric scale that allows you to measure the speed of a racing car.

If you’re looking for a classy sports watch, this timepiece could be a great investment.

7. Rolex Deepsea Sea-Dweller ($18,225)

This Rolex watch is designed for deep-sea exploration. It has a triple lock waterproofing system and a thick, scratch-resistant domed sapphire crystal.

Interestingly, this vintage Rolex watch is waterproof up to a depth of 12,800 feet (3,900 meters).

If you’re into Rolex investment, then this watch might be worth adding to your collection.

8. Rolex GMT Master II ($15,214)

Launched in 1955, the Rolex GMT Master was originally developed to be a navigation instrument for tourists.

Meanwhile, the GMT Master II was unveiled in 1982. It’s an aesthetically pleasing investment watch with a remarkable ceramic bezel and an oystersteel case.

9. Omega Seamaster Diver 300M ($6,194)

Omega Seamaster Diver 300M is made from stainless steel and has a black ceramic bezel with a white enamel diving scale. The skeleton hands of this luxury watch are plated with rhodium (an expensive precious metal) and filled with white Super-LumiNova (an illumination product).

10. Tudor Black Bay ($3,820)

The Tudor Black Bay watch boasts self-winding mechanical movement with a bidirectional rotor system. It’s waterproof to a depth of 660 feet (200 meters) and comes with a matt black rotatable bezel and a black dial.

Now, let’s go back to the main question:

Are watches a good investment?

As we’ve seen, investing in the watch industry can be quite complicated. For example, some watches canlose value when their design is no longer in vogue, for instance.

Also, a watch investment often comes with a lack of liquidity and unexpected costs.

And let’s not forget that there are many counterfeit watches on the secondary market. This means you have to do thorough research before investing in watches.

Is there any alternative investment worth exploring?

Investing in fine wine could be the answer. This asset has proven to be recession and inflation-proof over the years.

Fine Wine Investment: An Excellent Collectible to Invest In

Here are the reasons why it could be worth investing in fine wine:

Stable Returns: Investing in fine wine usually offers consistent returns compared to traditional investment assets like stocks and commodities. According to the Knight Frank Wealth Report, fine wine delivered 16% returns in 2021 and an average of 10%-14% annual returns for the past 30 years.

Low Volatility: The wine market shows less volatility since it isn’t correlated to the stock market. In fact, fine wine usually performs well even during economic downturns. For example, the Dow Jones and S&P 500 fell -22.7% and -19.6% during the Covid-19 recession. Meanwhile, fine wine only dropped by -1.4% during the same period.

Fine Wine Improves With Age: Unlike fashionable watches or luxury cars, fine wine improves with age. This means its value usually rises in the long run — making it a profitable investment.

Demand Usually Outweighs Supply: Most of the finest wines come from Bordeaux and Burgundy. But due to limited vineyard space and strict production regulations, the quantity of wine produced is limited. Meanwhile, there’s a high demand for these drinks throughout the globe.

Additionally, fine wine helps you diversify your portfolio and reduce your overall investment risk.

So, how do you put your money into fine wine?

Invest in the finest wine bottles through Vinovest — a platform that helps you buy, store, and sell top-notch wines from all over the world.

Here are some benefits of investing through Vinovest:

Vinovest safely stores your wines in bonded warehouses (you don’t have to pay any VAT or excise duty for this).

It helps you buy wines at the best wholesale prices directly from global wine exchanges, winemakers, and merchants.

It charges a 2.5% annual fee (2.15% for portfolios of $50,000+), which covers storage, insurance, portfolio management, and fraud detection.

But that’s not all - there are many other benefits too! Check out the Vinovest website to discover more.

Diversify Your Portfolio With Fine Wine and Luxury Watches

The luxury watch market has a plethora of timepieces that could be worth adding to your portfolio. But bear in mind that you must research the market thoroughly before starting your watch investment journey.

And if you want to explore a profitable alternative asset, check out fine wine.

Visit the Vinovest website today to discover how you can easily invest in extraordinary wine bottles. All you need to do is sign up and then watch your investment grow!