I love watches. Truly. I’m crazy about them.
I marvel at their complications, but I’m drawn even more to their aesthetics — their shape, design, appearance. And I’m intrigued by the image they project, and what they say about the wearer.
I’m never without a watch, except in the gym. A gentleman has so few ways to accessorize his wardrobe, I can’t imagine not wearing a watch. And a lady’s look just isn’t complete without a classic timepiece. A watch is the perfect accessory: aesthetic and practical.
I’ve bought and sold many luxury watches over the years. Many I purchased simply to flip. Some, however, I bought with the intention of keeping forever. Watches are fabulous heirlooms. Many are designed to outlast the buyer. And when someone inherits a watch, they inherit something that was very personal to the original owner. An heirloom like that carries a lot of meaning. Moreover, a classic watch will be as relevant forty years from now as it is today.
I don’t have a huge watch collection, but I have enough pieces to afford variety regardless of activity or occasion. Some I bought new, some were pre-owned. Some are dress watches and some are sport watches. The oldest watch in my collection dates to the late 1940s. The newest model is less than a year old.
An obsession with watches comes at a price, and begs the question, “Is a luxury watch a good investment?”
If you’ve already tired of reading this blog, the short answer is, “Sometimes.”
A luxury watch can be an investment, but even if you buy it for a crazy low price the appreciation probably won’t match the return you can get from a solid dividend-paying investment.
For example, in 1960 an Omega Constellation, Omega’s flagship model, sold new for about $100. It would have depreciated markedly for years following the purchase, hit a low point, and then gradually appreciated thereafter. Nearly sixty years later, that now vintage 1960 Omega (in stainless steel, not gold) sells for around $1,400, assuming is was well maintained. If that sounds like a reasonable return on the investment, consider that $100 invested and earning a mere 6% since 1960 would return more than $3,300 in compounding interest.
Was that luxury watch an investment? Yes, insomuch that it eventually appreciated in value. Was it a good investment? Well, not compared to an interest-bearing account.
Remember, the best investments pay interest or dividends while they appreciate. A watch won’t do that.
But the fact is, you can’t accessorize that stunning Loro Piana suit with a dividend-paying stock. And while your awesome stock portfolio might get you invited to swanky cocktail parties, it won’t help you arrive fashionably late, or tell you when it’s time to leave.
No, for those things you need a watch. And if you’re going to wear a watch, you might as well wear a finely crafted watch that’s worthy of respect. A watch that makes a statement about you and your personality; a classic watch that holds its value and is designed to outlast you; a conversation piece. And if you’re obsessed with watches like I am, you’ll need several watches to accomplish these tasks.
So, how can you turn a luxury watch purchase into an investment? A few tips ….
Buy Pre-Owned Luxury
First, don’t buy new, unless you’re prepared to wait the rest of your adult life for a reasonable return on your investment. Now, that said, I’ve bought new watches. But I wasn’t buying them as investments.
When you buy new, you’ll get white glove service at the boutique. You’ll receive VIP treatment (with comfortable sofas and free bottled water) from attractive, well-dressed associates who’ll compliment your excellent taste. You’ll get a really expensive box for your really expensive watch, a full factory warranty, and the security of knowing every component in that watch is factory original and authentic. But that watch is going to depreciate significantly once it’s worn. That’s just the way it is.
If you want to get the most value for your luxury watch dollar, buy a pre-owned watch.
A great time to buy a good stock is after its price has fallen, hit a low point, and has just started its rebound. The same is true when buying a luxury watch. If you’re prepared to wear a well-cared-for, pre-owned watch that has depreciated sufficiently, you can own that luxury watch for less than half the price of a new one. You might even save sixty to seventy percent.
For example, a brand-new stainless steel and gold (two tone) men’s Rolex Datejust will set you back more than $11,000. Alternatively, you can buy a mid-1980s stainless and gold men’s Rolex Datejust (perhaps with original box and papers) for around $3,500. And you’ll pay considerably less for a women’s model. An all stainless steel model is cheaper still.
If you take care of that pre-owned Rolex, it will probably never be worth less than the price you paid for it. In fact, it’s likely to increase in value. The same is true for many luxury watch brands.
Buy a Classic, Iconic Watch
Another way to get the most value for your money is to buy a classic watch, not a trendy one. Classic watches have broader appeal. The consistent demand will drive up the value of your watch and make it easier to sell or trade later on, if you choose not to keep it forever.
Whether a dress watch, a sport watch, or something in between suits your style, there are several watches to choose from that have changed very little over the decades. Their style and proportions are classic, and demand for these watches is stronger today than ever.
A great example is the Cartier Tank. Cartier introduced its Tank for men and women in 1917. Its timeless styling remains relevant and popular more than a century later. Today Cartier makes several models of its classic Tank, but the original watch’s DNA is evident in every model. Another example of a timeless classic is Jaeger-LeCoultre’s Reverso, the style of which has remained largely unchanged since it was introduced in 1931. The same can be said for the Rolex Datejust, which debuted in 1945 and is perhaps more popular today with men and women than ever before.
When it comes to selecting a sport watch, there are several iconic, moderately priced options, including the Omega Speedmaster, Omega Seamaster, Rolex Submariner, TAG Heuer Monaco, Breitling Navitimer and Zenith El Primero, to name just a few. You can find particularly good deals on pre-owned Omegas. Omega watches are as tough as they are handsome, like their most celebrated brand ambassador, James Bond.
If you’re looking for haute horlogerie at a very reasonable price, consider buying a pre-owned Girard-Perregaux or Jaeger-LeCoultre. If you want to take a road less traveled (and have a ton of money lying around), consider a pre-owned Patek Philippe, Audemars Piguet, Vacheron Constantin, or A. Lange & Söhne.
Buy Brands That Retain Their Value
To maximize your watch-buying dollar, buy a brand that retains its value well.
If I asked you to name a luxury watch brand, you’d probably say, “Rolex.” Rolex has the distinction of being the most recognized luxury watch brand in the world. While not haute horlogerie, Rolex makes outstanding watches that hold their value better than other brands. Rolex might not make the very best watches in the world, but Rolex is, arguably, the very best watch brand in the world.
According to Worthy.com, the watch brands that hold their value best are
- Rolex
- Jaeger-LeCoultre
- Patek Philippe
- Omega
- TAG Heuer
- Breitling
Play it Safe: Buy a Best Seller
When it comes to annual sales, Rolex, Cartier and Omega are among the top selling luxury watch brands. These brands are best sellers for a reason. They’re among the most recognized luxury brands in the world, and they’re highly influential watchmakers. All three brands produce outstanding, moderately priced (well, relative to other Swiss brands) watches that appeal to a broad range of tastes.
Buying a top-selling model from a top-ranked brand, e.g., Rolex Datejust or Submariner, Cartier Tank Solo or Ballon Bleu, or Omega Seamaster or Speedmaster, is one way to help protect the value of your “investment.” Where there’s a good new market, there’s usually a good pre-owned market. Should you decide to sell your watch, or trade up, the more demand for your brand and model, the better.
Like most things, the prices of new and pre-owned watches are determined by supply and demand. There are only a few luxury watches on the market, e.g., the Rolex Daytona, for which there’s not enough new stock to meet demand. This creates a waiting list situation for buyers wanting a new model, and drives up the price of pre-owned pieces. If you’re willing to pay full retail price for one of those models in
short supply and wait indefinitely for a call from the authorized dealer, your new watch might instantly be worth more on the pre-owned market than the full retail price you just paid. In those situations, your capital investment and time might yield a very nice return – but only if you’re willing to sell the watch you waited so long to get.
Head Versus Heart
To help turn your luxury watch purchase into an “investment,” consider the following suggestions:
- Buy pre-owned watch;
- Buy a classic, iconic watch;
- Buy a brand that retains its value;
- Buy a best seller.
But in the end, your watch is an accessory, not an investment.
As with the clothes you choose, the watch you wear should reflect your personality. It should say something about who you are and what you aspire to. And you should love the way it looks on your wrist.
When you go clothes shopping, your choices are never purely rational or utilitarian. You don’t take a suit or dress off the rack and think, “Hmm, this is serviceable enough. It’ll cover my body adequately.” You don’t tell the shoe salesperson, “Oh, I don’t care; anything that protects my feet is just fine with me.”
No, you select clothes, shoes and accessories because you want a particular look – you want to project a particular image.
Your clothes, shoes and accessories allow you to introduce yourself to others without saying a word. Whether you’re dressed up or dressed down, what you’re wearing sends a very clear message.
Selecting clothes isn’t a purely rational decision, and neither is selecting a watch. Your heart plays as big a role as your brain in these decisions. So, while there are steps you can take to make your luxury watch purchase less of a mad splurge, the reality is you’re buying a gorgeous accessory (and potential heirloom), not an investment.
Shop around, and have fun doing it! This is a purchase that can last a lifetime, and might even get passed down one day to someone very special. Enjoy the hunt!
Visit Hodinkee.com, the world’s leading online watch magazine, for outstanding videos, insight and expert advice on a variety of watches. There are numerous YouTube channels for watch buyers and enthusiasts. Hodinkee, Watch Finder & Co., WatchBox Reviews, Teddy Baldassare, A Blog to Watch and Federico Talks Watches are a few of my favorites.
Browse models offered by Omega, Cartier, Rolex, Jaeger-LeCoultre and all the other brands listed above to see what suits you. And don’t overlook other great brands not mentioned in this post, including Breguet, Blancpain, Piaget, Parmigiani Fleurier, IWC, Ulysse Nardin, Panerai, Glashütte Original, Montblanc, Baume et Mercier, Nomos, Frédérique Constant, Longines and others. There’s a lot out there to choose from. From a few hundred dollars to several thousand, there’s something for every budget.
Whether it’s your first luxury watch or merely your next one, buy a watch you love to look at. Buy one that reflects your personality, and projects the image you want to project.
If you love the way it looks on you and you can afford it, buy it … and enjoy it for decades to come!
