How To: Buying watches as an investment
Anyone who is familiar with the topic of watch collecting sooner or later ends up with a simple question: Can watches also be bought as a financial investment or as an alternative investment? The clear answer to this is: yes! However, it depends a lot on which watch you buy, how long you can wait to sell and what expectations you have of the return. In practice, some watches are much better suited to investing than others.
When you think of watches as an investment, you often think of limited editions. However, these are usually not more stable in price than other models, at least not always. The decisive factor is whether the model is still being produced, whether the watch has a known history and whether there are collectors for the watch brand. Pocket watches can also be ideal as an investment, but you should also know your way around this as well as possible before entering the market.
The perfect investment watch for beginners
In general, however, one should not buy watches solely as an investment. Watches do not yield any returns and are difficult to sell in times of crisis. But you can take the profits with you tax-free – if you do it right. Before you buy a watch as an investment, you should definitely take a close look at the market and the most important models. In this guide article, our editors show what is really important when buying watches as an investment and how you can achieve good returns.
At the end of this article you will also find a large guide with watches that, in the opinion of our editors, are among the best models currently available to buy as an investment.
How do watches as an investment work?
The principle behind buying a wristwatch or pocket watch as an investment is simple. Many manufacturers artificially reduce production of their most popular models in order to keep demand high. The prices for used models are then often well above the original list price for new models. Sports models made of stainless steel from Rolex, Audemars Piguet and Patek Philippe are currently hard to come by and are therefore in great demand.
If you don’t want to be put off with an imaginary waiting list, you can simply buy your watch second-hand or from the gray market. Practically all models are available immediately, but you have to pay a corresponding surcharge (in English: “Premium”). This surcharge is not only to be found with expensive luxury watches, but also with inexpensive manufacturers for whom there are collectors. Anyone who has a coveted Seiko automatic watch, for example, can achieve good returns here.
When buying a watch as an investment, it is crucial that you know your way around the market and buy models that are suitable for a wide range of collectors and watch wearers. The best example of this is currently the Seiko SKX007 on the Jubilee band, i.e. the SKX007K2. This model is a classic, but was also discontinued by the Japanese manufacturer in August 2019 when the 7S series of movements was discontinued. The prices on the market for this timepiece have increased by around 20-25% since then.
What should you look for in a watch?
Vintage watches are often bought as an investment. These models have the advantage that they are no longer produced from scratch and the number of models in circulation that is in good condition is continuously decreasing. With vintage watches in particular, however, it is important to note that you have to be extremely knowledgeable in order to find a good snapper. From the case material to the movement to the equipment and the manufacturer, there are many things to consider here.
Often gold watches are bought as an investment. These models have a very decisive advantage: even if the model itself is no longer popular, you at least have the material value. Gold is currently extremely expensive again, so cheap purchases of gold watches a few years ago can now pay off. However, one should always note that only the gold counts when it comes to the weight of the watch – no watch strap, glass, clockwork or non-gold components are weighed.
Some manufacturers are also much more in demand than others. When choosing the right manufacturer, it helps to take a look at the history of the brand. If a brand has been particularly innovative or if there is a large group of collectors, the watches from this manufacturer tend to increase in value significantly faster. In addition to the well-known luxury brands, Gruen Precision, Arctos and Universal Geneve are undoubtedly among the most popular vintage watches as an investment.
Often, a set of diamonds or other gemstones can also make sense. However, this only applies if the quality of the stones is absolutely flawless. In the case of many subsequently attached gemstones (so-called aftermarket trimmings), the gemstones tend to reduce the value of the watch. The original trimmings from Rolex, Patek Philippe, Audemars Piguet or other luxury brands can, however, have a positive effect on the potential for returns in the long term.
The best investment pieces in every price range
Regardless of which price range you are looking at, you shouldn’t always keep an eye on the percentage profit margin. Whether you sell a watch with a profit of 1,000 euros or ten watches with a profit of 100 euros each may seem irrelevant at first glance – in practice, however, that changes suddenly. If you become a business with the watch trade, you have to register a business and pay taxes. The tax-free profits can only be realized if the buying and selling of watches does not get out of hand.
If you want to buy particularly expensive watches and see them as an investment, it is best to use steel sports watches. These timepieces are currently particularly popular and generate top returns.