When you hear the word “investment,” most people think about traditional investment vehicles like stocks and bonds. However, did you know you could invest in luxury watches?
Luxury watches aren’t just mere accessories. They are also specimens of ultimate craftsmanship and can be viable investments if you know how to pick the right ones. However, if you want to learn “how to invest in watches,” you must first learn about the market and which brands hold value over the years.
Luckily for you, this article will explore the benefits of investing in watches and the best watch brands to invest in.
Are Luxury Watches a Good Investment?
Before we learn how to invest in watches, let’s determine whether watches are a good investment. There are various articles on the internet that say that luxury watches outperform gold and real estate.
In the chart above, we can see that Rolex outperforms many traditional investments like stocks and gold. However, there is a catch. When it comes to luxury watches, only a small number of luxury brands are dominating the market. Other watchmakers like Hublot don’t enjoy nearly as high returns as Rolex or Patek Phillipe.
So, are watches a good investment? They are if you choose the right brands and models. For example, the Patek Phillipe 57111A had a jaw-dropping ROI of 788% from 2017 to 2022.
On the other hand, brands like Hublot don’t record such high ROIs over time. This doesn’t mean Hublot makes bad watches. It just means that Hublot watches are not suitable for investment.
Why Invest in Luxury Watches?
Every investment carries some sort of risk level. Investing in individual stocks can yield high returns but it carries significant risk.
On the other hand, luxury watch investing is relatively less risky. It is like investing in raw materials like gold and precious metals. Moreover, luxury watches are generally made from these precious metals and hold their value.
The value of luxury watches can also rise at a higher rate than the raw materials themselves. Investing in luxury watches gives the owner a tangible asset whose value can increase over time due to rarity and reputation.
Additionally, watches can also be a great way to diversify your portfolio. You can spread your investments across different asset classes. And the best part is that the saleability of some luxury watches makes them a highly liquid asset.
What Returns Can You Expect When Investing in Luxury Watches?
As mentioned above, investing in luxury watches can yield returns greater than the precious metals they are made from.
While gold and other precious metals are stable investments, the luxury watches market has witnessed a return of 12 times that of silver and 4 times of gold.
However, not all luxury watches will give you the same amount of returns. Here are some key factors to consider when investing in luxury watches-
- Luxury watch brand
- Brand Collaborations
- The rarity of the watch model
- Condition of the watch
- Maintenance
- Documentation
- Materials
- Market Demand
- Historical Performance
- Other Economic Factors
There are many luxury watch brands available to buy. However, it is important to conduct thorough research and find out the saleability and demand for a particular luxury watch before buying.
We recommend choosing Rolex or Patek Phillipe luxury watches as they have been shown to outperform broad market indexes like the S&P 500.
How to Invest in Watches?
You will have to make some initial investment to buy the watch. The actual price will depend on your budget and the type of watch you want to buy. Generally, you can get great starter luxury watches from $12,000 to $20,000.
Here are some tips that will help you get started and find the best investment watches to invest in.
Research Brands and Models
First and foremost, it is important to understand the pre-existing luxury watch market and conduct thorough research to explore the most profitable brands, watch models, and materials.
Create a List of Watch Models
After researching, it is best to create a list of watch models you want to invest in. This will help you streamline your investment plan and focus on opportunities that align with your goals.
Find Reliable Reselling Platforms
Since you get returns from reselling luxury watches, it is important to find reliable and trustworthy resellers. Generally, reputable dealers, auction houses, or authorized resellers will help you resell genuine luxury watches with proper documentation.
Track the Market
You should track the market and identify the current trends, demand for models, and accurate pricing. This will help you identify potential investment opportunities and make the right decisions whether the investment is right for you or not.
Purchase a Luxury Watch
After you have found the perfect model, you can make your purchase. You can either find a reliable seller or purchase it online. Buying offline allows you to check the watch in person whereas online platforms offer some great watch investment opportunities.
Make sure to determine the condition of the watch and maintenance history, and ask for documentation before buying the watch.
Monitor the Price of Your Watch
After you have purchased your desired luxury watch model, it is time to monitor the market and watch out for any potential price increases for your particular watch.
Monitor the model’s performance by tracking resale values, market trends, and auction results. It is important to pay special consideration to tracking as it will reveal the best time to sell your investment and get the maximum ROI.
Sell Your Watch at the Right Time
Monitoring the market will help you determine the right time to sell your investment. You can also consult expert advisors and use the data from tracking to determine the best time to sell your luxury watch.
Read Also:- Fidelity Automatic Investing: Step-by-Step Guide
Top 5 Luxury Watches to Start Investing
Here are the 5 best investment watches to get you started.
The Rolex Daytona Green Dial 116508
The Rolex brand is known worldwide for its luxury watches and it is one of the best-performing brands in the market. Their long history of producing premium watches is backed by an unparalleled brand reputation.
The Rolex Daytona Green Dial stands out with its distinctive green dial. Moreover, the 40mm case is made with 18-carat gold. The green dial has also been discontinued which adds to the rarity of this premium watch.
Rolex Daytona 116500LN Panda
The Rolex Daytona 116500LN Panda is another premium watch by Rolex that was recently discontinued. It got its ‘Panda’ name because of its contrasting white-dial and black sub-dials.
The 40mm steel case features a distinctive black ceramic bezel and offers a sporty look.
Anniversary Rolex DayDate with Olive Green Dial
This is a special edition Rolex watch with a 36mm case. It is crafted with 18-carat rose gold and offers an elegant and sophisticated design. It is one of the best investment watches for beginners as its price is at its lowest point.
It is currently valued at $41,500 with prices reaching around $90,000 in the past.
Patek Phillipe Nautilus 5711 with Blue Dial
Patek Phillipe is another popular brand of premium luxury watches that is great for luxury watch investing. This watch is a testament to Patek Phillipe’s beautiful craftsmanship.
The 40mm sophisticated steel design offers a sporty look with contrasting luminous hands standing out from the vibrant blue dial. Moreover, it also has the coveted self-winding mechanism, making it one of the best investment watches for beginners.
Patek Phillipe Nautilus 5712 with Black and Blue Dial
The Nautilus 5712 with Black and Blue Dial is another popular luxury watch from Patek Phillipe. The 40mm steel case is similar to the 5711 model with distinctive black and blue dials.
The brand reputation of Patek Phillipe coupled with the elegant design of the watch makes it a very sought-after model which will be a great addition to any investment portfolio.
Final Words
Investing in luxury watches is not easy and requires knowledge and understanding of the watch market. Moreover, you also need proper knowledge of the current market trends and brand reputation to identify the best investment watch models and when to buy them.
This beginner’s guide will help you understand the best investment watches to buy and why you should invest in luxury watches.
Frequently Asked Questions(FAQs)
Ans. The condition of a luxury watch is a major factor in determining the resale value. If a watch is pre-worn and still in great condition, it can fetch you a high ROI. However, if you are buying a luxury watch purely for investment purposes, it is best to keep it unworn and in the best possible condition.
Ans. The documentation of a luxury watch is required to prove its authenticity. A watch without documentation and a box will have a significantly lower value.
Ans. Rolex and Patek Phillipe are the best luxury watch brands to invest in. However, other brands in the market make worthy investments. Audemars is another popular brand for luxury watch investing. Together, Rolex, Patek Phillipe, and Audemars are known as “The Big Three” or “The Holy Trinity” of luxury watches.
