#AskBRP Episode 27
A question I am asked very often is “are watches a good investment?” With the stock market being so volatile lately, and metal prices down, investors are looking to put their money somewhere with some real grown opportunity. If you are going to invest in watches they can produce a large return on investment if you know what you’re doing. However, if you don’t do the research and think any watch you buy will increase in value over time, you will absolutely lose money. Are watches a good investment? They definitely can be, but unlike stocks and mutual funds, watches are a riskier proposition.
First, you need to pick the right brand. Do not, I repeat, do not buy any watch that is not considered a high end luxury Swiss brand if you are looking to invest. Yes, the Invicta in the kiosk in the mall had an MSRP and is discounted 90% but it’s still a rip-off! Those watches are a dime a dozen, are made like crap, and don’t re-sell for anything. If you are serious about investing in a watch then you need to buy a serious watch. Rolex is the most obvious but there are plenty of other luxury brands. Companies like Audemars Piguet, Patek Philippe, Jaeger LeCoultre can be great to put your money into. Plus you’ll have a baller watch to tell the time with.
Second, decide whether you want to buy a new watch or a used watch. Common sense would say to buy used because it’s always cheaper, but buying a new watch has its advantages. For example, if you bought a new Rolex Daytona with a Zenith movement in the 90’s, never wore it, stashed it in a safe, and took it out today, it would be worth $30,000 or more. Compare that with a used one in excellent condition from the same year and you’re talking half that price. So by paying a couple thousand more in the beginning your return on investment is huge. But not all new watches fetch such a high premium 20 years later so you have to be careful. Most of the time buying a pre-owned watch at a great price is your best bet. Seven years ago you could buy a used Rolex Submariner for $4,500 in a store. You could sell that same watch back today for the same price. In seven more years I’m sure you will be making a profit. So it just depends on which watch you’re buying whether to decide to buy new or used.
Third, a lot of what determines a watch’s value is how long you have had it. Some watches can go 10, 20, or 30 years without increasing in value. Then, for whatever reason it may skyrocket in price. The watch market is very unpredictable. For example, the Rolex Milgauss was made and discontinued like 50 years ago. It was a complete dog watch that never sold. Now, if you type vintage Milgauss into the search bar on eBay they are crazy expensive! But 10 years ago you could have picked one up for nothing. So a lot depends on how long you hold on to your watch.
Finally, sometimes you just get lucky. It’s rare but these luxury Swiss watchmakers do make mistakes. Sometimes having an error on your watch can make it worth a ton of money. Other times you may find a crazy deal at your local shop where the seller doesn’t know what they have.
At the end of the day, what makes a watch a good investment is up to you. If you spend the time and do the research, you should do OK buying the luxury watch you want.
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