A Timely Question – How can I Invest in Luxury Watches?

Let us start off this article by defining what an investment watch is. An investment watch is one that retains its value or increases in value over time. Take the Rolex Daytona for example. There was a time when Rolex could not sell these watches for the life of them. Models would sit on shelves for years without being sold. Today, specific Daytona models, such as the 6239 and 6263, fetch prices at auctions well into the million-dollar mark offering a huge return on investment for the owners of these collectible pieces. So what makes a good investment watch? And what features should you look out for when considering purchasing a watch for investment purposes? We answer these questions in depth in this edition of A Timely Question.

1) Invest in something that you’re interested in

People purchase luxury watches for several reasons, but in general to own and wear a timepiece that means something to them. Being interested, passionate, or even just liking the brand or watch you’re looking to invest in is an important factor. As long as you follow this initial important step, the rest of your investing endeavours will come easy. And if for any reason, your investment watch does not increase in value over time, at least you’ll be in possession of a watch you can enjoy.

2) Interest, inform, invest – 3 simple steps for successful watch investments

What’s the secret recipe for choosing the right watches for a profitable investment? Well, it’s quite simple. As we’ve said, an interest in watches is a good start, because if you find the topic dull you’re unlikely to want to research the required material.

That brings us to the next point. You will need to inform yourself. Focussing on one topic or brand is usually a good bet, as you don’t want to spread your knowledge too thin. It’s being meticulous and knowing the small details that will set you apart from other buyers.

3) Look for watch brands that are in high demand

When looking for a watch that will retain its value over time, it is evidently important to look to the past and evaluate brands that have continued to perform throughout generations. It is well established in the watch world that the brands Patek Philippe and Rolex are two safe bets, as they’ve tended to retain value over other brands. These are highly prestigious companies with strong demand for their timepieces. You’re sure to always find somebody who will want to buy a watch from these brands.

4) Look for specific models with unique features such as special dials

Yes, there are certain brands that offer a sounder investment choice. Here’s a good recipe to follow: an interesting backstory, a unique dial or other characteristic, and small production number. Having all of these can greatly increase the value of a watch.

One example of watches with special dials are the Rolex Daytona “Patrizzi” models, which are particular reference 16520 Daytonas that actually have a defect causing a discolouration on the subdials. This has increased their price manifold.

5) Mechanical watches make better investments than quartz watches

A fact is, that in the world of horology, mechanical watches are generally more desired than those with quartz movements. So it is no wonder that when looking for an investment timepiece, you’ll have better luck with mechanical watches.

You may find some quartz watches which have risen in price over time. There is always an exception to the rule, but you will find that those instances are quite rare. When shopping around for newer watches though, you will want to stick to those with mechanical movements.

6) Limited edition watches can yield short-term profits

Some limited edition watches can even bring in short-term returns. For instance, bronze Panerai models have shown rapid increases in price. Other examples of watches that have shot up in value are the Omega Seamaster 300 “Spectre” or the Omega Speedmaster Snoopy. Indeed, the law of supply and demand works the same in the world of watches! It isn’t always easy to get your hands on a limited edition model. It definitely isn’t unusual for them to be sold out before they hit the stores and to get one you’ll need to be on the waiting list for the watch.

7) Purchasing from a trusted and secure source on the pre-owned market

The time to invest in a pre-owned watch is now, with the market growing at a nice pace over the years. When looking for a watch to invest in, you shouldn’t limit yourself to new models. A certified pre-owned or vintage watch can make just as good as an investment, if not better. But the market for vintage timepieces can be filled with landmines. Often you’ll find ‘Frankenwatches’, meaning that they have had parts exchanged, often unbeknownst to the next owner! Of course, once no longer in its original state, a watch can lose a lot of its value. That’s why one should be careful and buy from a trusted source.

To offer you security, CHRONEXT has eliminated any risk for their customers by having an in-house atelier with expert watchmakers who thoroughly inspect every single timepiece that goes in and out. Each watch on our site comes with an exclusive CHRONEXT certificate guaranteeing that it is genuine and providing an additional 24-month warranty.

8) Don't spend more than 10% of your investment capital on watches

Here’s a quick tip: You should look to keep capital allocation into watches at a certain level. A rule of thumb is to allocate not more than 10% of your investment funds to watches. Why? Diversify, reduce risk, and enjoy the returns!

9) The importance of the right care for your timepiece

One factor people often overlook is the cost of storing their watches. In addition to the maintenance, you should think about investing in a heavy duty safe at home.

So, is the watch industry the right place for your investment?

If we can leave you with a concluding statement, it would be to only get into watch investments if timepieces are your passion. Everyone in the industry agrees that buying a watch should be first and foremost for the enjoyment of the watch itself. Evidently, the watch market partly operates on an emotional level, which is why there is no precise formula for investing in timepieces. What are your thoughts behind watches and investing?