The Finer Things – Investing in Watches – Part One
Watches as an investment?
Hang on, surely wristwatches are technological dodos?
Doesn’t everyone now measure time by means of a hand-held device?
And – a few years ago — didn’t Jonathan Ive, Apple’s design supremo, predict oblivion for mechanical watches in the wake of the launch of the Apple watch (remember those?)?
Anyway, old-fashioned watches can’t open your garage doors, book you an Uber or feed the cat. What is the point of them?
Well, they tell the time rather well, often look amazing, and even – sometimes – increase in value.
For example, take the Rolex Daytona. There was a time when Rolex couldn’t shift Daytonas.
These watches would sit on shelves for years.
Now some Daytona models, such as the 6239 and 6263, fetch prices at auctions well into the millions, offering a massive return on investment for the owners of these collectible watches.
Watch collecting has even become a little cool in recent years. But how do you start? With which wristwatches should beginners start?
Which brands offer watches that tend to appreciate over time? There are two answers here.
There’s the short version – which will be the focus of the first of our two-part blog – and the long version, which we’ll feature in our follow-up next month.
The short answer is very simple: Rolex and Patek Philippe.
Among watch snobs, Rolexes are desperately uncool – many aficionados claim that their watches are really not that special, that they’re not masterpieces.
However, Rolex watches are a good investment because quite simply people care about the brand.
The company’s marketing since the 1960s has ensured that Rolex is one of the most- sought-after luxury brands.
This means that the watches hold their prices well, which creates a cycle – the better they hold their price, the more people value them, the better they hold their price.
Rolex has created a virtuous circle that would now be very hard to break. Rolex will likely always be a good investment.
Patek Philippe have nurtured the story of their brand even more assiduously.
It’s claimed that fewer than 1 million Patek Philippe watches have been made since 1839. That’s a smaller number than some renowned Swiss watchmakers produce in a year.
Apparently, the Patek production process is so intricate that it takes nine months to assemble its most basic watches, and more than two years to make some of the more complex models.
Whether or not this is true is almost irrelevant.
As is the claim that some Patek Philippe watches are so in demand that interested parties must demonstrate that they are sufficiently high-calibre collectors by applying for permission to buy the watch.
However, cynicism aside, Patek Philippe watches are sound investments.
The quality of the movements, the use of precious metals, and the impeccable designs ensure that you know what you’re getting with a Patek Philippe.
Add all that to the brand’s exceptional narrative and you have not just a watch for life but a watch for several lifetimes.
Part of Patek Philippe’s allure is that the company claims that the watches are so well made that they last for generations.
The “You never actually own a Patek Philippe, you merely look after it for the next generation” advertising campaign is a classic.
So, how do you go about snaffling your first Rolex or Patek Philippe? How do you know which watch to buy?
You must first do your research and learn about different models and key features. There’s an ocean of information out there and just diving in can be intimidating.
But dive you must.
Because arming yourself with a fundamental understanding of your target watches will reap rewards in a market that’s saturated with fakes.
You should also build a relationship with a reputable watch dealer, who understands what you’re looking to achieve with your investment.
Their knowledge will help you avoid buying mistakes and their professional network might be invaluable in helping you to source your ideal piece.
Obviously, your choice of watch will affect its performance as an investment. But a luxury watch is as much a lifestyle choice as an investment.
Is this a watch you’ll wear every day?
What is your budget?
Will this be solely for investment, or is personal taste a consideration?
If you plan to wear your watch every day then, for practical reasons, a vintage piece might not be the right option.
All these issues will affect your final choice.
Finally, a buying tip.
If investment appreciation is your principal target, then anything with a moon-phase or minute repeater feature would be an ideal purchase.
Next month, we’ll look at investment opportunities with less famous watch manufacturers and reveal our choice for the perfect first watch for a beginners’ watch collection.
Paul Connolly
Paul Connolly has been a journalist for more than 20 years, as a reporter and editor for Argus Media, Reuters, The Times, Associated Newspapers and The Guardian. He has covered Islamic Finance for Reuters in the 1990s. Paul has since helped launch three newspapers, as well as reported from Tokyo, Los Angeles and Stockholm.
