Watches for Investment Guide [Complete Guide to Investing in Watches]
Do you want to buy watches that increase in value over time, and which prove to be great investments? Looking at watches over time, some models and brands have proven to be beneficial for owning in terms of value.
However, there are no guarantees that these watches are good buys, and have never been. A watch price depends on the market’s request and availability, which can vary over time for countless different reasons.
Following trends affect the prices of watches, with that said there are possible ways to spot trends and thereby invest in watches, although it might be rather difficult.
Over time, some specific brands such as Rolex, Tudor, Omega, Patek Philippe, and Audemars Piguet have proven to be good investments overall. Of course, there will be less sought-after models, just as there will be some models that are more sought-after than others.
Since the Daytona reference 116500 was presented in Basel World 2016, the market for Rolex and many other brands thereafter has started a trend. But although the Daytona together with the Nautilus, Royal Oak, and Black Bay Fifty-Eight today are highly sought after and are sold at a premium, it hasn’t always been that way.
The Daytona was in fact a model in the 60s and 70s that wasn’t popular at all. In fact, many pawn shops and jewelers specifically called out that they were not looking or had any interest in purchasing ANY Daytonas or Cosmographs from Rolex.
It was the famous actor and racing driver Paul Newman that started to freely pose with his rather (at the time) unpopular Daytona reference 6239 that made the Italians pick up his choice of watch and start to call it the ”Rolex Daytona Paul Newman”.
As we know today, the Rolex Daytona reference 6239, also known as the Paul Newman is perhaps one of the most iconic watches of all time and has great meaning when it comes to the history of Rolex watches. The Daytona 6239 is an interesting watch with its’ history and is a good example of how a trend completely can change the interest in a watch.
As of today, sport models from Rolex tend to be extremely sought after and waiting lists at different authorized dealers are often non-existent simply because they are already too long.
As the interest in Patek Philippe’s Nautilus and Aquanaut, or Audemars Piguet’s Royal Oaks is so high, the demand for the watches is higher than the supply, which often for these models results in a premium when buying these types of watches second-hand.
Now, will the case always be like this or may this just be temporary? Well, perhaps both. No one can tell for sure if the current situation will last or not forever. Just like no one can predict if the stock market will go up or down.
But as of today, purchasing a Rolex Submariner, GMT Master II, Daytona, Nautilus, or Royal Oak seems to be beneficial if you believe you can get it for the right price.
What should I look for when buying a watch as an investment?
When looking to purchase a watch as an investment, there can be different factors to look into. If a watch is being discontinued what happens to the market then? The Rolex GMT Master II reference 116710LN has from its release been a less sought-after GMT-Master from Rolex, but when the model got discontinued at Basel world in 2019 by Rolex, the value of the model heavily increased overnight.
Now, why might this be the case? As the Rolex GMT Master is one of Rolex’s most important models it will always have a special place in the Rolex collection and history. The fact that the model at the time when it got discontinued almost was impossible to get from Authorized Dealers and the fact that no more models were going to be produced for the market, the price and demand quickly increased dramatically.
Predicting trends can be hard but worth investigating are popular models, such as the Rolex 16610LV “Kermit” which have different dials, cases and insert variations. Small details make all the difference in the world for collectors, so these can be interesting to have a closer look at.
Perhaps small changes, or in some cases errors such as the Rolex Daytona APH-dial, can be collectible in the future.
Can the prices of a model drop drastically?
The short answer is yes, and it may depend on a lot of different factors. Again, this is similar to the way a stock can drop dramatically, or how house prices can decrease within a short period of time – for a number of different reasons.
As of now, popular Rolex sports models have a higher demand than supply, this topic, the Rolex shortage, is a commonly discussed topic.
If Rolex were to increase its production heavily, supply will meet and feed the demand faster causing the models to be easily available, which can cause second-hand prices, which often demand a premium, to drop in prices.
Other factors such as a recession may cause equity problems for individuals resulting in them being forced to sell their watches, thus reducing the demand, but increasing the supply. If everyone were to sell their popular sports model in order to get money fast, the obvious result would be that the prices decrease.
If you buy watches for investment with the concept of supply and demand in mind, you will have a higher likelihood of making a good purchase, as this is ultimately what will affect the prices over time.
Another possible cause may be a watch brand releasing an updated version of a current model which instantly becomes more popular than the previous version, this may result in more interest in the newer version, which makes the demand for the previous version less.
Summary
The prices of watches follow a simple principle of demand and supply.
If the demand is higher than the supply, in many cases, such as stainless steel sports models from brands such as Rolex, cause a premium and a higher price on the second-hand market.
Following trends, and thereby predicting upcoming demand may also result in a price increase over time. As a buyer, you should always evaluate the risk of buying a watch if you are looking at it as an investment as there are no guarantees a watch will increase, or decrease, in value over time.
