Is a Watch a Good Investment?

I spent a lot of time in my early twenties reading articles about how much an investment made some number of years ago would be worth in the present (looking at you, The Motley Fool). Earlier this week, one such article – “If You’d Invested $10,000 in Berkshire Hathaway Stock 10 Years Ago, Here’s How Much You’d Have Today” – appeared in my news feed.

Apparently, a $10,000 investment in Berkshire Hathaway stock in 2014 would have grown in value to $31,797 as of August 2024.

Neat!

Can’t relate.

That isn’t really the point – nor is this article investment advice.

Watches, especially collectible models, tend to fluctuate in value. There’s no clearly defined market price to help owners or potential buyers determine if their watch will appreciate or depreciate. In many cases, past auction results and the secondary open market are the primary drivers of used watch values.

So, how do you know if a watch will be a good investment?

Let’s get something straight:

There is (basically) no such thing as a “sure” investment.

Stocks, real estate, art, and collectibles are not guaranteed to appreciate in value or provide any meaningful return on the money invested in them. It’s nice when they do, but almost no investment is guaranteed to pay dividends.

Watches are by no means a path to an early retirement, but a few pieces have appreciated by record-breaking figures. Many models have also gained value beyond their original sale price, where others still have a niche in the market that is so volatile that entities can buy and sell (flip) certain watches often enough to make a livable income out of it – so their course advertisements say, at least.

Looking at the vast ocean of watches ever produced throughout history, most have values that remain submerged beneath the sparkling surface of an original sticker price. Fashion watch brands and more ‘common’ luxury watch models frequently fall victim to this unfortunate ceiling – so no, I wouldn’t bank too heavily on your Timex or Casio one day financing that beach house.

However, if you’re in such a position wherein you want to invest in watches and can afford to do so, there are a few indicators that suggest a timepiece might experience value appreciation in the future.

Authenticity

Verifying the authenticity of a rare timepiece may seem trivial in some settings. Unfortunately, the watch market is occasionally infected by well-crafted fakes and believable knockoffs. If you’re allocating money toward an expensive piece – regardless of whether it’s new or secondhand – it is imperative to ensure that it was made by the named manufacturer with the correct materials and components.

This concern becomes even more relevant in online transactions, where you may not be able to view the watch in person or confidently have it assessed by a reputable appraiser before the sale.

Always view any available documentation for the watch and learn common flaws that may appear in faux examples. Taking the extra time and spending the extra few dollars to guarantee authenticity is always a smart move with high-dollar timepiece transactions.

Rarity

Rare watches almost always carry a higher value than mass-produced models, so try to find a limited-edition or low-production timepiece as an investment. One of the primary value drivers for these low-volume models is their collectibility; popular watches among seasoned watch collectors, who have the know-how and (usually) funds to acquire the most sought-after pieces, tend to trade at higher market prices.

Rare watches also frequently have a reasonably well-defined secondhand market. With only a limited number of specific models in existence, tracking recent public transactions (retail and auction) can help investors and collectors ascertain a fair price for a timepiece.

Researching the exact make, model, and reference number of your desired watch may produce pricing insights from recent transactions.

Condition

Some scratches on the clasp of your worn-daily watch may not bother you very much, but even minute flaws can affect the realized value of a high-dollar timepiece at the time of sale. Pricing also favors watches bearing their original components, so all-original, unblemished examples typically fetch more money than repaired or damaged ones.

A demonstrated history of cleaning and servicing by a professional may supplement the value of a watch (much like a car with a clean history and regular service records). A poorly maintained watch may drive buyers away, even if you are listing the watch at a discount to the market price. Luxury watches, in particular, should be serviced every few years, which includes disassembling, cleaning, inspecting, oiling, and adjusting the watch.

Services like these ensure a watch performs at its peak and operates as it should – critical components of most timepiece sales.

Packaging and Documents

Collectors of almost anything will favor something with (or in) its original box and/or documents, and watch buyers are no different.

Part of the value of a watch comes from the accessories it comes with and the packaging it comes in. For example, a secondhand Rolex with its original box and documents will often sell for more than an otherwise identical Rolex without these items. Many buyers tend to view these as a signal of how much care has been taken with the watch. If the original owner kept everything from the original sale, they were probably more likely to have cared for it throughout their ownership.

Original boxes and documentation also indicate that the watch is authentic. The original documentation and packaging often bear details specific to the watch, down to the serial number. Having this form of “proof” can go a long way in determining a timepiece’s authenticity.

History and Provenance

Some lucky folks manage to strike gold twice – they get their hands on a (1) rare watch (2) previously or presently owned by a relevant figure.

A watch with outstanding provenance – a fancy way of describing its history or story – is rare. When noteworthy figures, particularly political figures or celebrities with links to the watch industry or a watch manufacturer, previously owned a watch, it can dramatically increase the piece’s value. Similarly, if the specific watch you want to invest in was used for an event or piece of entertainment (television or movies, primarily) and you can prove its use, the value of the watch is likely to be higher than an identical watch not used for said purposes.

Other relevant history may include previous damage or repair documentation, the exact age of the watch, and when it was built relative to every other example in a watchmaker’s production timeline (first and last watches, for example).

If you can find a watch with a proven and documented history, these facts can go a long way in the sale process.

Again, it is generally unlikely that a watch will appreciate in value – many other investment classes (such as stocks, bonds, high-yield savings accounts, and real estate) traditionally exhibit a stronger return on invested capital than the broader watch market.

But some watches do appreciate, and a small number of them manage to break all expectations for how valuable they will become.

Watch investing is hardly for everyone, but if you have the cash and rational expectations for the present and future value of a timepiece, it can be a great way to diversify your portfolio and show off a little bit in the process.

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