Watches As Investments: Yes or No?
It is plausible for one to see luxury wristwatches as investment vehicles when one discovers the heavily waitlisted Patek Philippe and Rolex wristwatches costing between two and three times the retail price. It certainly gives the impression that you can make a quick buck by owning luxury watches. Investing in wristwatches is a moronic proposition perpetuated via the display of only a few “winners” and is by no means representative of the market as a whole.
In fact, very few watches eclipse their retail price, and many tank in value. Watches will only hold their value if you buy the right watch; preferably something that has always been in demand and at a good price relative the qualities therein. But under no circumstances should you buy a watch with the expectation of appreciation. You should only invest in watches if you can afford to spin the roulette wheel,.
Even if you get lucky, maintenance costs quickly eat up any gains you’ve accrued. Depending on the timepiece, servicing and repair can be a hassle, too. This is especially true when you buy a vintage watch. The maintenance costs are exorbitant when you consider traditional investment options. Unless you intend for your watch to be a “safe queen,” it will naturally degrade with use and be worth less.
A total loss is the worst-case scenario for any investment. Watches have an innate risk of a total loss without much upside potential. You have to worry about loss, theft, and more. You may seek insurance, but those costs often outweigh any gains you’ve made.
Furthermore, do not let an “investment” justify an ill-advised watch purpose. If you cannot afford to lose everything on a timepiece, it would be a rash decision to buy it. Using loans or consumer credit to purchase so-called “investments” is a ridiculous notion and should never be attempted. Don't risk financial ruin to support an already rash decision.
The best reason to buy a watch is because you like it and because it has objective merit. There is simply no other motivation that provides so much enjoyment from buying a watch.
Despite my condemnation of buying watches for investment reasons, it should still be on your radar when you are considering buying a watch. Unlike buying for the sole purpose of profit, investment potential is simply be a value-add to an otherwise great watch. Unlike investment potential, value retention is something that should be one of your criteria with a high-end timepieces. Making money shouldn’t be a priority, but losing it all isn’t what you want. For example, pre-vintage Rolex has already exited the hype machine, and you can count on those watches (at least at the moment) to hold their value.