Watches

Published: 26/11/2023

Invest in Luxury Watches

Many say that time is money. Well, if you’re planning on investing in watches, this saying gets a whole new meaning.

Indeed, watch investments have become a popular diversification method for savvy investors seeking alternative asset opportunities. Of course, we don’t mean just any watches, but luxury watches, particularly Rolex, Patek Philippe, and Audemars Piguet.

Reports by the Boston Consulting Group reveal these watches gained an annual 20% appreciation from 2018 to 2023, surpassing the S&P 500's 8% yearly growth.

This shows the incredible potential of watch investments which, with the right approach, can yield some great returns.

This is where Splint Invest can help, providing investors with the tools and resources needed to make more informed alternative investment decisions. Learn how to invest in luxury watches with us and increase your chances of possible returns!

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Why invest in luxury watches?

Luxury watches from well-known manufacturers have been an exciting investment opportunity for several years. The popular steel models from Rolex are so out of stock that enthusiasts are willing to pay a considerable premium on the secondary market.

Especially popular are watches that do not yet show noticeable signs of wear and are in good condition. In cooperation with our partners, we can guarantee the authenticity and quality of our assets.

But why have watch investments become so popular over the years? There are several reasons for that, but the main factors are the potential for growing ROI and diversification.

The potential for high returns

Leading brands consistently raise base prices, empowering secondary markets. This drives up older or discontinued models' values within a watch family.

A Morgan Stanley report discussed by WatchBox has prompted consideration of the secondary watch market's future. Rolex's surging demand led to scarcity, favouring established client relationships. Standard Rolex models now trade 23.7% above retail on average, sparking sustainability concerns.

This is also reflected in the luxury watch market size, which reached over USD 49.8 billion in 2024, with projections for it to experience a 2.25% annual growth between 2024 and 2028.

Other indicators also seem to prove the incredible potential of luxury watch investments. The Knight Frank Luxury Investment Index, for example, estimates watches to exhibit an average ROI of 147% over a decade. Only wine and whisky show more impressive returns.

There’s also the already mentioned WatchCharts Index, which increased by over 80.6% between 2013 and 2023, surpassing gold which increased only by 46.3% in comparison.

According to the same index, the average annual return on watch investments between 2017 and 2023 was 10.4%.

Screenshot 2023 11 26 at 19.16.21

Of course, it needs to be said that, while luxury watches performed exceptionally well in the past, there’s no guarantee they will continue to do that in the future.

There’s also the case of finding the right models as, unfortunately, not every luxury watch you buy is the famous Patek Philippe Grandmaster Chime, which sold for a record-breaking 31 million dollars in 2019.

Portfolio diversification

Like in the case of other alternative assets, investors use watches for portfolio diversification, serving as a safety net against risks involved in other forms of investments, such as stocks or forex.

In general, investing in watches can help you reduce your exposure to market volatility and inflation. That’s because watches are tangible assets that often retain their value through times of economic downturns or high inflation.

Some investors also use watch investments as a hedge against currency fluctuations as, depending on the market, they can be valued in various currencies.

Liquidity

Unlike some other alternative investments like wine, whisky, or luxury cars, watches are relatively easy to sell. They are more compact, easy to store, and there are many online marketplaces for luxury watch collectors and investors.

On the flip side, this is mostly true for established brands and models, such as Omega or Rolex. Such brands are considered “blue chips” of the luxury watch world, with an almost constant high demand from a high pool of potential buyers.

If you buy a watch from a more niche or independent brand, however, you might struggle to find an interested buyer, no matter how rare or potentially profitable such a watch could be.

Watch investments vs other alternative assets

Luxury watches aren’t the only alternative assets we specialise in here at Splint Invest. In our portfolio of available investment options, you’ll also find other alternative assets, such as luxury cars and fine wine.

Here’s how these two alternative investments compare to watch investments:

Feature	Watches	Luxury Cars	Wine
Potential for Appreciation	High for rare/historic pieces; fluctuates for specific models	High for classic/limited edition, depreciation for most	High for fine wines, requires exceptional quality and limited production
Liquidity	High for established brands (Rolex) but trickier for less popular brands	Lower and susceptible to economic downturns	Low for lesser-known vintages, often requires help from auction houses
Storage & Maintenance	Easier to store but requires occasional maintenance	High storage needs, requires a controlled environment and regular maintenance	Must be kept in a cool, dark and humidity-controlled environment
Enjoyment of Asset	Can be worn and enjoyed	Can be driven and enjoyed (but depreciation cuts into returns)	Not for investment purposes (though you could drink it!)
Investment Expertise	Crucial (understand brands, models, market trends)	Necessary (classic car models, restoration, market fluctuations)	Essential (grape varietals, vintages, storage, fine wine market)

Opportunities & risks of watch investments

Pros

Cons

Potential for Appreciation: Certain rare or historically significant watches, especially from prestigious brands like Rolex or Patek Philippe, have a proven track record of increasing in value over time.

Tangible Asset: Unlike stocks or bonds, you can hold and enjoy a watch. You can wear your investment while its value potentially grows. This can be appealing to those who prefer holding something concrete.

Diversification: Adding watches to your portfolio can be a way to diversify your investments and spread out risk. The watch market may not move in the same direction as the stock market or other asset classes.

Relatively Liquid (for certain brands): Compared to some other alternative investments like art, luxury watches can be easier to sell. There's a network of watch dealers and collectors who are actively looking for additions to their collections.

High Initial Investment: Luxury timepieces, especially those with high appreciation potential, can be very expensive to buy, limiting their accessibility for some investors.

Market Fluctuations: Even the market for prestigious brands can be susceptible to economic downturns. During recessions, selling luxury goods, including watches, might become more difficult.

Dependence on Brand and Model: Not all watches are good investments. The potential for appreciation is dependent on the specific brand, model, rarity, and condition.

Limited Liquidity for Niche Brands: Watches from independent watchmakers or less popular brands can be challenging to sell due to a smaller pool of interested buyers.

Counterfeit Risk: The luxury watch market has a significant counterfeit problem. Investing requires expertise in spotting fakes to avoid losing money.

How to find the best watches to invest in

Finding the right watch to buy can sometimes be tricky. However, if you want your investment to have the chance to perform, spending some time doing your research is an absolute must.

Here are some general guidelines to consider when choosing a watch to invest in:

Exclusivity: The watch should have been produced by one of the well-known watch manufacturers and should also enjoy a certain degree of recognition among buyers. At Splint Invest, for example, we buy watches that aren’t directly accessible on the secondary market and can therefore be sold profitably at the end of the investment horizon.

Quality: When buying watches, make sure that the watch has never been worn or, if it has been worn, is in stellar condition. Try to also look for watches in original packaging, as it may further increase your investment’s value over time, especially if the watch is from a limited edition with unique packaging.

Production quantities: When considering buying new watches, look for those that are produced in small quantities. When we buy watches, for instance, we try to pick those whose production is expected to cease completely within our investment horizon. As soon as this happens, we can offer our investments on the secondary market with a price premium.

Value over time: Always do your research to learn how various watch brands and models retain value over time. Browse various platforms, compare used prices to retail ones, look at historical data, and choose watches that seem to perform best over time.

What are the risk factors to consider?

Although it can be an exciting investment opportunity, investing in luxury watches also comes with its share of potential risk factors, including:

Oversupply of watches: If watchmakers start to mass-produce their timepieces without considering limited editions, eventually the supply will meet the demand and the secondary market won‘t be so attractive anymore. However, this is not likely to happen. Companies such as Omega and Rolex have been in this business for a very long time, and they know exactly what to do in order to keep the demand high.

Recession: During economic downturns, people have less disposable income and are therefore less likely to spend money on luxury watches. On the other side of the spectrum, it also means that many people may need extra money and therefore may be more willing to sell watches they own. As a result, demand falls and supply increases, which hurts prices.

Counterfeit: Due to the popularity and exclusivity of premium watches, counterfeit pieces are not uncommon on the market. As the popularity of the category increases, the issue will become even more paramount. This is why it’s vital to have a professional who can confirm whether the watch you bought is authentic. A good practice is also to look for pieces with official certificates of authenticity, although those can be falsified, too.

How to invest in luxury watches

It’s not just the case of what watch models you invest in but also how you do it. When it comes to luxury watch investments, there are several ways you can buy renowned models, each offering its own set of potential advantages and drawbacks.

Buying from authorised watch dealers

Experienced watch dealers specialise in buying and selling luxury timepieces. They often have physical stores or online platforms showcasing their collections.

You can browse a dealer's inventory or inquire about specific models you're interested in. Reputable dealers can offer guidance on watch selection, market value, and collectability. They can also verify the authenticity of a timepiece before you purchase it.

On the flip side, dealers tend to charge more for watches, with a markup often significantly exceeding the watch’s actual value. If you want to ensure the timepiece you buy is 100% authentic, though, buying from an authorised dealer is your best shot.

Buying from the secondary market

By secondary markets we mean various platforms where pre-owned luxury watches are traded. This can include online marketplaces dedicated to watches, auction houses, or forums for watch enthusiasts and collectors.

These platforms offer a wider selection of watches compared to traditional dealers, potentially at more competitive prices. You might find vintage or pre-owned models that have appreciated in value. However, it's crucial to do your research and potentially use third-party verification services to ensure the authenticity of the watch before buying.

Owning watch company stocks

This method involves investing in the publicly traded stocks of companies that manufacture and sell luxury watches. For example, you could invest in Rolex (through their parent company) or Swatch Group, which owns several luxury watch brands.

By owning shares in these companies, your investment benefits from their overall financial performance and growth. This approach allows you to gain exposure to the luxury watch market without needing to purchase individual timepieces.

On the other hand, the value of your holdings fluctuates with the stock market, which can be highly volatile. If you want to physically own a watch and aren’t comfortable with risks associated with the stock market this might not be the best option for watch investments.

Investing in watch investment funds

The final method of investing in luxury watches is through specialised investment funds, such as ours here at Splint Invest. These funds pool money from multiple investors to purchase and manage a collection of luxury watches.

Our watch fund is overseen by professionals who handle the selection, buying, selling, storage, and potentially the insurance of the watches within the portfolio.

Investors purchase shares in the fund, gaining exposure to a diversified collection of luxury watches. This approach can be appealing for those who lack the time or expertise to manage their own watch portfolio.

It also requires a much lower initial investment compared to buying such watches from dealers or secondary markets, where luxury watches can cost at minimum several thousands. At Splint Invest, all you need to start investing is €50.

Best watches to invest in

As mentioned several times throughout this page, finding the right watch is key. Before we provide you with some examples of models that can potentially drive the best returns, here are some additional factors to consider when looking for the best watches to invest in:

Focus on Established Brands: Rolex, Patek Philippe, Audemars Piguet, and certain models from Omega and Cartier tend to hold their value well and have a proven track record of appreciation.
Look for Rarity and Limited Editions: Scarcity can significantly drive up the value of a watch. Look for limited-edition releases or discontinued models with low production numbers.
Consider Historical Significance: Watches associated with historical events or iconic figures can fetch high prices at auctions.
Think about Model Popularity: Certain models within a brand consistently see high demand from collectors. Research popular models within your chosen brand.

Now, let’s go through some of the recognised timepieces and brands that tend to offer exquisite returns on watch investments:

Rolex Submariner

Introduced in 1954, the Submariner is a pioneer in the dive watch category.

Vintage Submariner models, particularly those from the 1950s and 1960s, can command high prices. An excellent example is the Rolex "Comex" Submariner, created for a French diving company, which is a sought-after collector's item due to its rarity.

Limited-edition Submariners, like the anniversary models, also tend to appreciate in value. However, the standard stainless steel models, while popular, might not see the same dramatic increase in value compared to rarer variants.

Patek Philippe Nautilus

Launched in 1976, the Nautilus challenged the perception of luxury sports watches. Its sleek, integrated steel bracelet design and use of precious metals like gold and platinum created a unique blend of sportiness and elegance.

When it comes to the Nautilus’s investment potential, stainless steel models have seen significant appreciation in recent years.

The waiting lists for new stainless steel models at authorised dealers can be years long, further driving up the value of pre-owned pieces in good condition. However, limited edition Nautilus models crafted from precious metals can reach even higher price points.

Audemars Piguet Royal Oak

The Royal Oak debuted in 1972 and immediately broke the mould of traditional luxury watches. Its bold octagonal case, integrated bracelet, and use of stainless steel challenged the dominance of gold at the time. This innovative design and association with high-end watchmaking have secured the Royal Oak's place as a collector's favourite.

Early "Jumbo" models from the 1970s, known for their larger size, are particularly desirable and can fetch significant returns.

Limited edition Royal Oaks in unique materials or finishes can also be valuable investments. However, while the popularity of the Royal Oak has increased significantly, its overall investment potential might not be as high as, for example, the Nautilus due to its wider availability compared to certain Patek Philippe models.

It can still be a worthy investment, though, especially for those at tighter budgets.

Omega Speedmaster Moonwatch

Only one watch can say about itself that it has flown to the Moon and back. That watch is the Omega Speedmaster Moonwatch, worn by Buzz Aldrin on the moon landing in 1969. This has cemented its position as a cult classic and, naturally, has a huge impact on its price and investment potential.

Classic models of the Speedmaster Moonwatch, particularly those with the "step dial" and "Hesalite" crystal, have a strong track record of holding their value and even appreciating over time. Limited edition Speedmaster models commemorating space missions or collaborations can be even more valuable, offering incredible returns.

However, it must be said that due to the continued production of the Moonwatch, its overall appreciation potential might be more moderate compared to some of the other watches on this list.

Cartier Santos Dumont:

Named after the pioneering aviator Alberto Santos Dumont, this watch was designed by Louis Cartier in 1904. Its square-shaped case and distinctive Roman numeral hour markers established a timeless design that continues to resonate with watch enthusiasts.

Vintage Cartier Santos Dumont models in good condition, particularly those from the early 20th century, can be attractive investments.

The rarity and historical significance of these early models contribute to their high value. However, due to the reintroduction of the Santos Dumont in recent years with new models, the investment potential for modern versions might be lower than it used to be.