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You might be surprised to discover that the next big investment opportunity is ticking quietly on your wrist—luxury watches. A recent study suggests that some of these high-end timepieces may offer impressive returns, potentially surpassing even traditional staples like real estate. Let’s delve into why luxury watches could be the hidden gold mine you never anticipated.
Why Invest in Luxury Watches
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Key Findings:
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- Stability: Luxury watches have an annual volatility of just 3.90% and range the lowest of any asset class. In simpler terms, their market value does not fluctuate wildly.
- Steady Returns: With annual returns averaging 5.68%, high-end watches outperform real estate investments (3.14%) and fixed income.
Top Watch Brands to Consider
When it comes to luxury watches, not all brands offer the same investment potential. Here are some top performers with strong historical returns and enduring appeal:
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Audemars Piguet
An extraordinary average annual return of 11.68% makes this brand one of the top performers in the luxury watch market. Established in 1875, Audemars Piguet is synonymous with technical innovation and flawless craftsmanship, adding intrinsic value that collectors highly seek.
Patek Philippe
With a solid average annual return of 10.92%, Patek Philippe timepieces are considered a reliable investment by collectors Known for their striking elegance and limited production numbers, Patek Philippe watches are highly desirable, making them a mark of distinction and timeless style.
These brands have shown average annual returns close to those of the MSCI World Index (12.85%), which serves as a benchmark for global stock market performance. This strong performance highlights the investment potential of high-end timepieces.
However, it’s important to consider market trends. The study has also factored in the decline in the secondary market for watches over the past three years. According to a report from Morgan Stanley and WatchCharts, prices for watches from 35 prominent brands have decreased for 11 consecutive quarters.
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Despite this, the resale market boom in 2022 highlighted the investment potential of select watches. For example, the value of a secondhand Rolex Daytona surged to a peak of USD 48,500 in March 2022—a nearly 228% markup from its retail price of USD 14,800, according to WatchCharts.
The estimated market price of a resale Daytona by WatchCharts is around USD 25,594 (as of March 16, 2025), representing about a 79% increase from the retail value.
Post-2022, the study points out that brands like Rolex and Vacheron Constantin have shown returns of more than 50%. This strong performance highlights both brands as a noteworthy addition to an investment portfolio.
Liquidity and Market Considerations
Luxury watches might not be as liquid as some other financial investment assets. This means it could take longer to sell them for cash. However, their value retention makes them a reliable option for long-term investors.
Ticking Points: Factors Influencing Luxury Watch Valuations
Condition of the Luxury Watch
For vintage and antique watches, maintaining the ‘original condition’ (as far as possible) is important. Ideally the watch retains most of its original parts and hasn’t been excessively restored or modified. For instance, a completely original Rolex Daytona from the 1960s could be valued significantly higher than one with a replaced dial or polished case.
Authenticity
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Given that luxury watches are often produced in limited quantities, their high demand unfortunately leads to a proliferation of counterfeits. The original box, warranty papers, and related documents play a vital role in confirming a watch’s authenticity. These items help verify the watch’s provenance, track its service history, and ultimately enhance its value. Service records are particularly telling, as they disclose any past repairs, part replacements, or routine maintenance which can affect both the condition and originality of the watch.
Brand Prestige
Renowned watch brands like Rolex, Patek Philippe, and Audemars Piguet command higher prices due to their established reputation. Nonetheless, smaller, exclusive brands can also hold substantial value owing to their limited production volumes and exclusivity.
Watch Model
Image: Featured watches from Aristo Watch, luxury watch retail partner of KoverNow Hong Kong
The material and craftsmanship involved in a watch significantly impact its value. Watches made from precious metals or adorned with gems are generally more valuable. Mechanical movements are typically more prized than electronic ones, and additional complications, such as perpetual calendars, can substantially raise a watch’s value. Understanding the intricacies of the watchmaking process is essential, as fine craftsmanship can greatly influence pricing.
Emotional and Historical Value
For watch enthusiasts, storytelling adds considerable value. Watches with historical significance or those associated with celebrities can see a heightened demand.
Final Thoughts on Watch Investments
Navigating the intricate world of luxury investments requires a nuanced understanding of both luxury watches and traditional assets like real estate. Whether you are a seasoned collector or a novice investor, diversifying your portfolio with luxury watches can offer a hedge against market fluctuations and the dual enjoyment of owning and wearing a piece of horological art.
Insuring Your Luxury Watch
While investing in luxury watches, it’s crucial not to overlook the importance of securing your investment. Insuring your valuable timepieces protects against theft, loss, and damage, ensuring your investment remains safe and its value is preserved. KoverNow offers comprehensive coverage options that provide you peace of mind, knowing your prized watch is protected.
