Considering that we cannot recommend investing all your savings in watches, those who have followed the rise of interest in vintage watches evidenced that these watches have the potential of generating charming passive returns.
The vintage watch market can be volatile (as any other), with changing trends in watch sizes and case materials. Also rumors of new releases (then withdrawal from the market of a current reference) can be leading to a substantial run-up in prices and consequently in investment returns. That being said, its important to be aware of the general trends in the watch market and to commit to monitor and follow these trends on a constant basis.
Alternative investment asset classes have held an important place in diversified portfolios. Always more often intelligent investors tend to allocate some of their assets to art, classic automobiles, wine and jewelry instead of gold, stocks, and real estate only. Nowadays we could also add cryptocurrencies as they are becoming more and more fashionable. But the point is that watches, unlike the assets listed above, offer more than just the intangible pleasure of knowing that they can be a viable store of value if appropriately taken care of. They can also give day-to-day pleasure as they accompany you through life on your wrist. The watch is an accessory full of meaning, a part of you. Ian Fleming one said: "a gentleman's choice of timepiece says as much about him as does his Saville Row suit".
When it comes to investing in watches, the three crucial pieces of advice that cannot be stressed enough are as follows:
- First and foremost, only buy what you love, not what someone tells you should love or that someone tells you to buy. We often find ourselves buying a brand just because it is renowned or trendy. Nothing more wrong! This is a watch you will be wearing day in and day out, and you should buy it with the primary intent of wearing it and enjoying it as a timepiece. If the timepiece appreciates, it is an added bonus. Making price appreciation the “raison d’être” is a rather easy way to experience buyer’s remorse when the price appreciation fails to materialize.
- Secondly, buy the seller: whenever you are spending any amount of money on a watch online, buying from a reputable dealer is part of making an informed decision. A good watch dealership will offer a wide product range you can choose from in addition to a number of warranties along with your purchase, with a warranty on the proper functioning of the watch and a lifetime warranty on its authenticity being the most important. Dealers should also offer an option to upgrade your model at a later date, trading in your previous purchase against a more expensive watch as you move on in life.
- Third, if you are not sure which watch to buy, stick to the icons. Generally speaking, they are a lot easier to liquidate than exotic models, should you decide to sell your watch.
These are three tells that point to a high likelihood of price appreciation:
What follows are examples of watch investments over the last four years which went very well. Please note that even though these are real examples from our own watch database and bookkeeping data, there is no guaranteed margin when reselling watches and not each purchase will end up in a 7-plus % annual return. That being said, these examples should show the kinds of returns you can expect over time if you are lucky in choosing the right model at the right time for the right price. There is, of course, as in every other investment, the possibility of loss. (From our experience advising clients, investment losses are most often incurred when clients maneuver themselves to positions where they need money quickly – because of a divorce, for instance. Instead of making a rational decision, and shopping around for a fair offer, they sell their watch at completely underpriced valuations – e.g. at a pawn shop. So keep in mind that selling a watch often requires the patience to wait until the right buyer appears.
Here are the top 5 examples of ROI (return on investment) according to Chronocorner's personal experience (please note: we are not considering the disproportionate increase of some models for purely speculative reasons). Furthermore the Speedmaster, the Seamaster, the Submariner, the GMT Master, the Daytona, the Nautilus, and the Royal Oak will always continue to be in high demand because of their provenance and historical importance that makes them design icons of the watch world.
- Audemars Piguet Royal Oak "Jumbo"
Jan 2019 selling price: approx. 32'000.- Swiss francs
Jan 2022 selling price: approx. 110'000.- Swiss francs
This is equivalent to an annualized return of 50.92% (tot. return 244%)
Ok, perhaps we have taken a slightly extreme example, but still a real one.
Now let's analyze more tangible numbers and affordable for all budgets.
- Omega Seamaster Professional (ref. 2531.80.00)
Jan 2019 selling price: approx. 2'000.- Swiss francs
Jan 2022 selling price: approx. 3'000.- Swiss francs
This is equivalent to an annualized return of 14.5% (tot. return 50% over 3 years)
- Omega Speedmaster Professional Moonwatch
Jan 2019 selling price: approx. 3'000.- Swiss francs
Jan 2022 selling price: approx. 4'500.- Swiss francs
This is equivalent to an annualized return of 14.5% (tot. return 50%)
- Vacheron Constantin Triple Date Calendar ref. 4240)
Jan 2019 selling price: approx. 6'000.- Swiss francs
Jan 2022 selling price: approx. 14'500.- Swiss francs
This is equivalent to an annualized return of 34.2% (tot. return 140%)
- Rolex Datejust 36 (ref. 16200)
Jan 2019 selling price: approx. 4'500.- Swiss francs
Jan 2022 selling price: approx. 6'500.- Swiss francs
This is equivalent to an annualized return of 13% (tot. return 44.5%)
Analyzing these concrete examples we can deduce that by paying attention to the purchase of the right watches in the right moment we can expect an excellent ROI. Furthermore, we can enjoy our precious companions waiting to generate profit for us. Definitely not a bad hobby!