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How to start a watch investment?

The pre-owned watch market is booming. While the primary market is expected to grow 1% per year, the growth rate in the pre-owned segment is 8-10% per annum. Limited supply paired with growing demand for luxury watches has resulted in rising prices and increased trading activity on the secondary market.

 

How to invest in luxury watches?

Buying watches directly. The most obvious way to invest in watches is of course to simply buy one from an authorised dealer, auction website or marketplace. The advantages are full control and choice over which watch you want to buy. Having the ability to shop around, compare prices and wear the watch. The disadvantages compared to some of the other options are that a higher level of knowledge is required, you’ll need to consider storage and insurance depending on where you buy it from. You may have to be careful around authentication.

Other factors that can come into play in terms of investment viability are brand recognition and whether the watch is used, new, or vintage. Some brands like Rolex and Patek Philippe have historically performed very well and seen the value of their timepieces steadily climb over the years.

 

New vs Used 

Are new or used watches better for investment? This is a tricky question that depends largely on the timepiece. For many watches, if you buy them brand new, you’ll take a hit on the value as soon as you walk out of the store. It’s best to buy many modern watches pre-owned, and let someone else eat the depreciation. Buying the watch at this depreciated price can shorten the time it takes to see a return on your investment. 

Now, what about vintage watches? The line between used and vintage can get fuzzy, but generally, a vintage watch is over 25 years old, and these obviously have to be purchased second-hand as they’re no longer produced. Vintage watches can make great investments as they’re usually more rare and unique than new or used timepieces. As soon as a timepiece is discontinued, its rarity begins to increase due to watches being destroyed, lost, or just plain aging. But the vintage market and the popularity of certain pieces ebb and flow.

While used and vintage watches are excellent investments, they are not the only game in town. Modern watches like the Patek Philippe Nautilus, Audemars Piguet Royal Oak, or almost any modern Rolex are so difficult to obtain at retail that they’re instantly worth more after you buy them new. The demand for these timepieces greatly outpaces supply, and some of these watches can be worth two or three times their retail prices on the secondary market. Depending on your desires and pocketbook, these may or may not be risky investments.

 

Watch brands with highest resale value 

Branding can be extremely important in terms of investment. A couple of key brands stand out from the pack and have historically performed much better than their peers in terms of holding and growing in value over time. 

Rolex is probably the best example of this. It’s very rare to come across any Rolex watch in good condition that has decreased in value over the long term, and a large majority of their watches have seen dramatic increases in their resale value over the years. Some other brands that have historically performed well in terms of resale value are Patek Philippe, Audemars Piguet, and certain models and watch lines from Omega.

In conclusion, there are various reasons to consider investing in watches, such as price appreciation and diversification. In order to get started, you can buy watches outright, investing stocks of watch-related companies or consider investing in a watch fractionally. Keep an eye on your specific reference and track the value of the watch over time.