How to Invest in Luxury Watches?
Have you ever wondered how to invest in luxury watches? Explore these proven 4 ways of investing in luxury watches and discover the benefits of fractional ownership with Investables!
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Luxury watch brands don’t just look good on your wrist. Valued at USD 7.18 billion in 2019, the watch market is set for growth at 4.3% CAGR (compound annual growth rate) until 2025.
The increasing popularity and availability of luxury watch investing options is sparking the interest of many buyers. But why invest in luxury watches when there are stocks, funds, crypto, and even other collectibles to invest in available on the market?
In this guide to investing in luxury watches, we will explore the depths of luxury watch investing, find out if they hold value, and discuss different ways to invest in watches.
Why invest in luxury watches?
What do the Rolex ‘Batman’ GMT Master II and Time (like the Time) have in common? They both increase in value with every ticking second. Yet, while the value of time is purely subjective, the ROI of this 2013 Rolex watch is very tangible for your bank account.
Luxury watch brands like Rolex, Omega, Audemar Piguet, Patek Philippe, Breitling, an others have seen an increase in value by 86% over the past 10 years. Not only this is an astonishing number and one of the best reasons to invest in luxury watches, but it makes luxury watches the number 1 performer among alternative asset investments, outrunning fine art, jewelry, and other luxury accessories.
Luxury watch brands like Rolex, Omega, Audemar Piguet, Patek Philippe, Breitling, an others have seen an increase in value by 86% over the past 10 years
According to Art Market Research, the price of luxury watches has grown by 5.1% in the first half of 2021 alone! While crypto such as Bitcoin and Ethereum are experiencing biggest drops of their lifetime, and major stock market players like Meta (Facebook), Netflix, and Google are down between 25% and 60% YTD, the less-liquid market for watches shows steady growth with every passing year.
But even watches have royalty among them. And we all know who I’m talking about.
All hail the watchmaking king
While the rest of the market has shown an impressive 5.1% growth during the first half of the year, Rolex decided to outpace everyone–the king of watches has shown an average price growth of 15%.
The swiss watchmaker has been hard at work, creating exquisite timepieces and rarest watches for royalty, the rich and famous, and even for James Bond–and today owning a Rolex is a sign of a true collector of all things fine and luxury.
Submariner model from the 1950s was recently sold for $100,000 at one of the auctions
Our Rolex Superhero Collection to invest in, which consists of two outstanding pieces–the ‘Hulk’ Submariner and the ‘Batman’ GMT Master II has shown a 23.15% ROI in the past 6 month (at the time of writing this article), something unheard of on the traditional trading market.
Imagine waiting a little longer–a Submariner model from the 1950s was recently sold for $100,000 at one of the auctions, excluding fees. Back then, it cost $180 to buy one ($1778 if we take inflation into account).
4 best ways to invest in luxury watches
There aren’t many ways to get a good watch to invest in, and they all require a different budget to start with. Below, we will look at 4 best ways to invest in luxury watches and find out what their benefits are.
1. Directly buy a watch
The most obvious way how to invest in luxury watche is to buy a luxury watch. The advantages of buying a watch through a retailer, online marketplace or an auction are evident: full ownership and control over your investment, decision of what you want to buy, and the ability to walk around and find the best price on the market.
The disadvantages of buying a watch directly are usually quite pricey, though: you need expert knowledge to avoid buying a fraud, while storing and insuring the watchpiece also comes at a hefty pricetag. In addition to that, not everyone can afford setting tens of thousands of dollars aside for several months or years in exchange for a watch.
2. Own watch stocks
While most luxury watch brands are family owned, investing in luxury watches by owning company stocks is nigh impossible without having close connections with the family. But let’s be honest–there aren’t many of us who can boast knowing the Swiss Stern Family or the Hans Wilsdorf Foudation members, right?
So, the alternative way would be to buy into watch businesses stocks.
Companies like Watches of Switzerland, a luxury watch retailer, have been traded on the London Stock Exchange for several years. In the last year, the company’s stocks were on the rise, going up by well over a 100%. Another company to consider os Chronext, who are planning to go public, but keep delaying their debut on one of the exchanges.
As you can see, this option is not as easy to go with. But top luxury brands being family-owned is good news for watch investors and collectors–while there is no hedge fund controlling the processes, the companies will strive to focus on quality rather than profits on annual reports.
3. Invest in funds
While we haven’t seen many publi ‘invest in watches’ funds, there are groups of people who get together to invest in collections of watches, artwork, wines and what not and enter into collective ownership of the assets that they manage to source.
Such funds are not opened to public, though, and you won’t find any exchange traded funds due to most countries’ regulatory restrictions.
You need expert knowledge to avoid buying a fraud, while storing and insuring the watchpiece also comes at a hefty pricetag
The only option that remains is to come together with a few friends and invest collectively. But again, the cost of storage and insurance will be proportional to the amount of pieces that you buy, as with the first option that we mentioned today.
4. Fractional Investing
This type of investing in luxury watches is the newest of them all. The process is simple: instead of buying a full piece for, say, $50K, you can buy a fraction of the watch. Or as many fractions as you wish, for that matter. Most fractional investment platform offer fractions of luxury watches starting from $50, which makes it affordable for most retail investors.
The company takes the responsibility of buying, authenticating, insuring, and storing the watch pieces. Then, they divide the initial price into equal fractions, usually with the help of blockchain technology. Then, the piece is auctioned on their platform, where users can offer bids for fractions or buy out a full piece at a set price.
The drawback of such investment method is that you don’t really get to feel the watch unless you become a full owner and ask the marketplace to ship the piece to you. Good news is, the reason you can’t do it is because the watch is already insured and locked in a safe, and its integrity will not be compromised.
The advantage is simple–accessibilty. For years, investing in luxury watches has been reserved for high-end society. With fractional investment platforms, this highly rewarding investment option becomes available to everyone. Now you don’t have to save the budget to buy a watch. All you need is to determine how much you are willing to invest and buy the amount of fractions that fit your budget.
Investing in watches has never been easier.
Whether you are an experienced investor or someone just looking to enter the market and reap ints benetis, you need a trusted partner who will source the best assets for you, ensure their authenticity, and guarantee the security.
That partner is Investables. Our platform was created by collectibles enthusiasts and technology experts to provide you with the best investing experience possible. We find, verify, insure, and store each asset so that your investment is not only secure, but is getting the value it deserves.
We partner with auction houses, collectors, and authorised retailers to find the best and most exclusive additions to your growing collection, from watches and fine art to estate jewery, vintage wines & whiskey, and even classic cars.
Explore our trending collections to find the pieces you dreamed of investing in and sign up for early access to always stay up to date with our company’s updates, new collections, and cool features that we have in store for you!
Frequently Asked Questions
1. What luxury watch is the best investment?
While all luxury watches are expensive, only 20% of them retain their value. Watchmakers like Rolex, Audemars Piguet, Patek Philippe, and others have shown a solid growth in value in the past years. They can be considered the best investment.
2. Does luxury watch hold value?
Not all luxury watches hold their value. Factors like watch popularity, scarcity, and price trends are the key factors that can help you determine if the watch you want to invest in will hold its value in years to come.
3. Is horological value the watch important?
Horological value is determined by the amount of effort required to create the watch, and the complexity of its mechanism. While it is an important price determining factor, it does not play a role when it comes to value growth on the secondary market.