October 30, 2023
Investing in Watches: Attractiveness and Market Characteristics

Luxury watches represent a unique sector, embodying craftsmanship, heritage, and prestige, which contribute to the appreciation of this luxury item over time. But what is the current market dynamic, and what are the peculiarities of acquiring luxury watches for investors?

Attractiveness for Investors
Luxury watches have long been regarded as one of the key symbols of status. The market is valued at 75 billion dollars, where pre-owned watches account for about 30% (22 billion dollars). Investing in vintage watches is seen as a promising strategy, especially when it comes to lesser-known brands that haven’t yet gained widespread popularity.

Market Performance
A report by the British company Luxe Watches showcased how lucrative luxury watches can be as an investment asset. For instance, according to the chart, the brand Patek Philippe demonstrated a growth of +207%, surpassing major stock indices such as the S&P 500 and FTSE 100. The overall Watch Market Index increased by +235%.

The report also identified certain models of luxury watches that exhibited remarkable profitability in 2022:

•   Patek Philippe 57111A with an ROI of +788%
•   Audemars Piguet 15202ST with an ROI of +613%
•   Rolex 116500 with an ROI of +197%.

It was noted that significant price appreciation is provided by simpler models without complex mechanisms.

However, not all brands showed high profitability. For example, brands like Hublot, BVLGARY, Piaget, H Moser & Cie, and Girard-Perregaux demonstrated an ROI of up to 8% over the past 5 years. Particularly, in 2020, Hublot’s ROI dropped to -2.2%.

This indicates that while these watches can be a beautiful addition to a collection for personal pleasure, they are not a favorable choice for investment in terms of financial profitability. There are watches for the soul, and there are watches for profit.

Watches require maintenance, and wearing them can reduce their value. They demand ideal storage conditions, unlike stocks or bonds. And, of course, the market is subject to trends and brand reputations, which can fluctuate over time.

In conclusion, besides financial gains in the long term, watches are objects of art and collectible items, adding value as objects of pleasure and expressions of the individual style of their owner.