Five reasons to invest in a luxury watch

For many, luxury watches are a highly sought-after possession. A symbol of personal success and status, people aspire to own a watch from brands such as Rolex, Patek Philippe, and Jaeger-LeCoultre. Buying a watch of this calibre often goes beyond status, aesthetics, and fashion—they are considered by many to be a good investment, both for the owner and for future generations, as watches are passed down as family heirlooms.

Here we explore some of the reasons to invest in a luxury watch:

Appreciating Value

With many luxury watches, their value can increase over time, proving to be a worthwhile investment. Unlike cars, which can depreciate by over 20% the moment they are driven away, luxury watches often retain or even grow in value. Due to limited production numbers, luxury watches frequently appreciate on the secondary market, particularly rare or limited-edition models. For example, the Patek Philippe Nautilus model has surged in popularity and value, with the Nautilus 5711 quadrupling in value since 2010. Classic models such as the Rolex Daytona and Audemars Piguet Royal Oak have similarly demonstrated their potential as valuable long-term investments.

Liquid Asset

Luxury watches make good investments because of their ability to offer quick and effective liquidity. Unlike property or shares, luxury watches are quick and easy to sell when you need to free up assets. With retailers maintaining limited supply, the secondary watch market remains vibrant, offering numerous outlets for reselling and converting watches into cash. This makes luxury watches a flexible investment choice that provides both enjoyment and financial security.

Perception of Success

A luxury watch is a powerful statement. It can instantly convey success and status, much like designer clothing or luxury cars. However, unlike wearing a full collection from Gucci or driving a Bentley, a single watch can make a significant impact on how others perceive you. For professionals whose careers benefit from projecting a polished and accomplished image, a luxury watch becomes a subtle yet powerful accessory.

Beyond its status, the allure of a luxury watch lies in what it symbolises—dedication, hard work, and the rewards of perseverance. Owning one suggests significant achievements, marking milestones that deserve recognition. However, it is important to maintain your watch in good condition, as this plays a crucial role in its resale value. For tips on caring for your luxury watch, see our guide to keeping your designer watches and jewellery sparkling.

Watch Flipping

Buying and selling luxury watches to make a profit, often referred to as "watch flipping," can be lucrative but requires careful planning and expertise. Entering this market demands the ability to identify undervalued pieces while managing the risks associated with market volatility.

In the US, flipping watches has faced increasing scrutiny, with resale values declining and waning demand from speculators making the practice less lucrative. Overproduction and market saturation have contributed to falling prices for once highly desirable models such as Rolex. However, the UK market tells a different story, with pre-owned watch sales growing substantially. Retailers such as Watches of Switzerland report increased demand for second-hand timepieces, driven by collectors and strategic price adjustments from brands like Rolex. Success in flipping depends on timing, regional market trends, and a deep understanding of the trade.

Portfolio Diversification

Luxury watches can provide a unique form of portfolio diversification, offering an alternative to traditional assets such as shares and property. While the luxury watch market is subject to volatility, its dynamics are often distinct from broader financial markets. This means that during periods of stock market instability or property downturns, certain high-demand watch models may retain or even grow in value, adding a layer of resilience to your investment strategy.

Investors who diversify their portfolios with luxury watches benefit from the tangibility and collectability of these items. Unlike purely financial assets, watches are physical, durable, and often tied to cultural and historical significance. By carefully selecting watches with proven long-term demand—such as iconic models from Rolex or Patek Philippe—investors can balance the inherent risks with the potential for attractive returns, especially in niche segments of the market.

Luxury watches present a unique opportunity for financial investment through various avenues. From appreciating value and liquidity to portfolio diversification and even flipping on the secondary market, there are multiple ways to benefit financially from these timepieces. However, as highlighted, this is not a risk-free endeavour. Market volatility, fluctuations in demand, and the need for expert knowledge mean that investing in luxury watches should be approached with caution. For those willing to navigate these challenges, the potential for significant returns and the ability to enjoy a tangible, prestigious asset make luxury watches an appealing investment choice.

If you're considering selling your luxury watch or jewellery, we offer a professional appraisal service along with fast and fair payment. Get in touch with us today to turn your items into immediate value.