Are Luxury Watches a Good Investment? | LuxyWish
A true watch collector, who genuinely appreciates the beauty that relies on a good watch, wouldn’t agree with most of the below-mentioned tips, practically being the ultimate watch flipping guide. But that doesn’t necessarily mean we don’t appreciate watches either.
We know how a well-built watch is the perfect showcase of art and engineering, but that doesn’t stop us and others from making a profit out of this passion. Surely there are also watches one should never sell, regardless of the profit. A watch that holds a sentimental value to the wearer, a family heirloom, a gift from your old man — those are priceless. As for the other unicorns, exit watches, or holy grails, that decision is up to you.
If you ended up here, it means you’ve already been introduced to the luxury watch market, and you may as well know a thing or two about the watch industry. Including how the resale value of specific brands often skyrockets. Rolex is only the tip of the iceberg.
Other reputable watch brands like Audemars Piguet, Patek Philippe, Cartier, Philippe Dufour, Jaeger-LeCoultre, A. Lange & Söhne, IWC, and many others, are those types of watch brands that keep their production limited, and at the highest standards of watchmaking. So where does this quick overview lead us to?
Regardless of whether you’re willing to purchase a watch at retail or on the grey market, three are the standards that will cause that price to alter in the future:
Certain factors like the movement’s accuracy, water resistance, case construct, overall aesthetics, and materials, should all be taken for granted. If you expect to invest in a watch, you should look further. For example, watches with in-house movements have always been rewarded with praises. Hand-polished cases, new watch dials, or a unique timekeeping concept — are all good indicators of quality watches that have a good chance of seeing an increase in price.
Few watch brands can comply with the highest standards of watchmaking, and even fewer of them can be treated as good investments. The other factor that defines if a watch is a good investment or not, is exclusivity. While Seiko Presage, for example, is an astonishing watch, comes with an in-house mechanism, features some mesmerizing cocktail-inspired dials, and overall is well-built, it is manufactured in thousands of pieces. It is difficult to say it will see a price increase as everyone can get their hands on one, as the manufacturer has the capability to meet the demand.
Having a reputable brand name on the wrist is always welcome. The craziest buyers are the ones who know nothing about the brand. They’ve heard the name be featured on a music video or movie, (also called namecheck or product placement) and want to have it at all costs. Add here a boost of marketing by watch blogs and social media influencers, and there you have it: The next watch that scores $300,000 on the gray market. Few brands manage to achieve such madness. The usual suspects are mentioned at the beginning of this article, along with Richard Mille and Hublot.
Don’t make rookie mistakes
In addition to the above-mentioned brands, there are also other worthy (investment-wise) watches that will not only retain their value with the passing of time but also see an increase in price, hopefully significant. On the other hand, many other watches depreciate in value with time.
To explain how to wisely invest in the luxury watches market, without making rookie mistakes, I can give an example from the vehicle industry.
In short, if you today buy a new car, whether it be a Mercedes, Toyota, Ford, Tesla, or a Maserati — its value would tomorrow decrease by at least 25%.
In financial terms, it is called depreciation. And it can vary from one brand to another, one model to another, and typically lays down between 15–35% in the first year and up to 50% after over three years. The same also happens in the watch industry, when most brands release their watch models with unreasonable retail prices. A steel Rolex, on the other hand, hasn’t dropped in price since the 1970s.
The buzz might not always be real
With quality taken for granted, exclusivity is what makes a watch’s price increase. If its release manages to create a buzz in the industry, it is a successful collaboration, a brand’s anniversary celebration, comes in a limited edition, has a new feature, a catchy design, or a groundbreaking new material, these are all good luxury watch investment indicators.
Although, not sufficient, nor mandatory. For example, many entry-level luxury, or luxury watch brands, have made it now a trend to release limited-edition watches of thousands of pieces quarterly, and that, in addition to their already existing collections.
More than an exclusive horological marvel that you would proudly wear knowing the same model belongs to very few people on earth, these “limited editions” are a publicity stunt, and also a black hole for the watch investors.
As for other brands that truly face a supply problem, (the demand is higher than their manufacturing capabilities), investing is safe, if you’re lucky enough to get your hands in one of them, in the first place.
Gold and diamonds are no longer the sensations
The days when watches made of precious metals or extremely valuable gems are long gone. A kind of hypebeast mentality has taken their place. Sports steel watches, Rolex Daytona, Patek Philippe Nautilus and Aquanaut, Rolex Sky-Dweller, Hulks, Submariner, GMTs, and all soda flavors, Pepsi, Diet Pepsi, Root Beer, and more) are the new grails. It’s similar to a gold rush, but without the gold.
ADs, Supply Problem, Waitlists, and How to enter the luxury watches market…
Scarcity plays a major role in entering the luxury watches business.
Rolex watches, for example, are not directly sold to the buyer. They are first sold to the brand’s authorized retailers all around the world, who then sell them to their local buyers. Many brands do it this way, and for most of them, it works perfectly fine. That, because the demand for them is normal.
Not for Rolex. It has become today nearly impossible to go to an authorized Rolex retailer and purchase a brand new Daytona or Submariner, or even the brand’s most humble pieces. That is because the retailer favors his/her loyal customers, who have previously expressed an interest in that retailer (have a record of buying jewelry or other watches in the jewelry shop).
But they won’t turn you down. In fact, you are registered on a “waitlist” and when the preferred model or “simply has Rolex on the dial comes”, you receive a call. It can be within a few weeks, months, years, never.
To explain, the waitlist is not chronological. It might even not exist. Frankly, why should an Authorized Dealer write down your name on a piece of paper so you can come back a few months later and make a quick, easy-earned profit?
No no no… You should first honor the retail gods so they might grant your wishes.
The same can be said about Patek Philippe, A. Lange & Söhne, Audemars Piguet, Omega, and other brands whose demand surpasses their manufacturing capabilities.
Bonus Section — 3 Affordable Watches to Invest in 2022
Seasoned players pull the trigger on watches that truly create a buzz. Any watch that brings an emotional value is worth purchasing. Even a brand like Casio, which is not very often mentioned on good watch investments, manages to deliver specific models that time has proven to keep their value and see an increase in price. The new Casio Pac-Man, for example, which was just recently released as a tribute to the iconic arcade game, is already being sold at double, even triple the price on the gray market. And that within the first year. It is a novelty watch and has already run out of production, further deepening the gap of supply. If you want to get into watch investing, you can start with that. Learn more about the new Casio x Pac-Man watch.
Although it would break the watchmaker’s heart to flip his watches, let alone consider them as a good watch investment, we can’t leave out of this article the amazing work of the Japanese watchmaker and mastermind behind Kurono Tokyo, Mr. Hajime Asaoka. The most affordable independent watchmaker of the moment happens to have a weak spot for quality, handmade processes, and reasonable pricing. This has made his watch collections, already limited, be even more exclusive and difficult to purchase. Learn more about independent watchmakers and microbrand watches.
Oris Divers Sixty-Five “Cotton Candy”
The Cotton Candy edition joined the brand’s Divers Sixty-Five platform last year in 2021. It features playful colors like lipstick pink, sky blue, or wild green — all pastel dials fitted in 38mm bronze cases. In addition, you can get one with a bracelet also made entirely of bronze. With the patina being developed in the future, thanks to bronze’s natural oxidation process, these watches will surely age well. As novelty models, their production is limited, although they’re still available for purchase from the manufacturer, for a few more months at least.
Originally published at https://luxywish.com on March 1, 2022.