Want To Invest In Watches?

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Here are some essential pointers.

Before we go any further, it is important for us at CrownWatchBlog to state our position. And here’s what we believe: we are staunch advocates of buying watches for personal pleasure, as opposed to viewing them as an investment option.

Why? Because the latter would quite simply take the fun out of the experience.

The reasons for buying a watch are many. Whatever these reasons may be, they should never be (again in our opinion) displaced by the belief that one can make an easy and sizeable buck out of a watch, like you would do with equities or bonds.

That said, the notion of watches as a good form of investment is one that is prevalent. So, let’s break it down, and we’ll leave it to you to decide if such a pursuit is, pardon the pun, worth your time.

GETTING BACK TO BASICS
What is an investment? It is an asset class you purchase with the hope of generating passive income while holding on to it (for example, a property to rent), or reaping a profit when you sell it (capital gain).

Here’s a fact: generally, a watch does not generate any passive income. Most times, it doesn’t even appreciate in value. Most collectors we spoke to agree that watches are not very good as investments.

Like any investment, there are no guarantees for gains and there are always risks. We'd say that it is very hard to predict which watch will be a good investment because the market is fickle and tastes change. What is considered ‘hot’ today may not be so in five to 10 years.

WHAT QUALIFIES AS ‘INVESTMENT-WORTHY’?
Brand pedigree and heritage matter. Most investment-grade watches coming from auctions are prevalently Swiss or German-made. Watches from these two countries are desirable because of their long history in watchmaking.

Any watch connoisseur will point to Rolex and Patek Philippe as brands to consider. Vintage watches from these two brands have consistently performed well at auctions. Besides the million-dollar Rolex Paul Newman Daytona, we notice that most Rolex’s sports models have done well in auctions. Prices of vintage Submariners like the Ref 5514 ‘Comex’ can fetch up to six-figure prices, and the Ref. 1680 ‘Red Sub’ (with the word Submariner printed in red) have appreciated in value recently due to the vintage craze.

Patek Philippe Ref. 2499
The Patek Philippe Ref. 2499 perpetual calendar chronograph 'The Asprey' was the most expensive wristwatch auctioned in 2018. More here

We also noticed that in recent years, vintage Omega watches have also increased in value due to the demand for iconic pieces. George Tan, a well-known Omega enthusiast, offers a tip: “An investment-worthy vintage watch would be one that is an iconic model, marked by events or related to famous people. The Omega Speedmaster is an example. It has a unique history and a lot of following for vintage pieces, as well as new limited editions.”

That said, not all limited editions are created equal. Some brands continue to make limited editions year after year with just cosmetic changes. This will only devalue the collection as collectors are quick to see through the charade. As for vintage pieces, many watches may not have genuine or original parts, and the working condition of the pieces will also affect resale value. Re-conditioned dials, for instance, are a definite a no-no.

WHAT KIND OF BUYER ARE YOU?
There are differences between someone who collects watches and someone who invests in watches.

Broadly speaking, collectors buy watches because they have a genuine passion for horology. They may sell watches to fund another purchase, but price appreciation would not be at the top of their minds.

Omega #SpeedTuesday Ultraman
Sold out in less than an hour, the Omega #SpeedyTuesday 'Ultraman' limited edition from 2018 is now a hotly coveted collectible. More here

At the other end of the spectrum, some watch investors may not even like the watches they buy. Instead, they are more interested in the profit that they can yield from the timepieces. Some of these ‘investors’ are known in the collecting community as ‘flippers’ – people who are always on the lookout for an opportunity to make a fast buck.

Take the latest sold-out launch of the Omega Speedy Tuesday ‘Ultraman’ limited edition. There are cases of people buying the watch just to ‘flip’ it for a profit. Given the high demand for the watch – it was sold out just over an hour – its prices soared instantly on the secondary market. The same goes for other recently hotly coveted models like the Rolex Daytona in steel with ceramic bezel, or the Rolex GMT ‘Pepsi’ – watches that are widely known to have high resale value and a long waiting list.

But back to what we opined right from the start – why buy a watch if you are not going to enjoy it for what it is? There might be a time when you find that you need to let a purchase go, whether it’s because you want to fund another watch or if you have gotten tired of it. Either way, if you are able to sell it off at a higher price, consider it a bonus. If not, know that at least you’ve had some very good times wearing it.

Published in In Depth
Tagged under investment
Zach Toh

A retired mechanical design engineer, Zach’s interest in mechanical watches began over 10 years ago with his first purchase. Since then, he has built a small collection, and shares his passion on his personal blog watchculture.blogspot.sg. His other hobbies include cooking, photography, and keeping updated with financial news