As passionate watch collectors, we understand the value of investing in a timepiece that not only holds sentimental value but also maintains its worth over time. That’s why we’re excited to share with you our research on why Rolex and Patek Philippe prove to be the best investment watches in the luxury market.
A recent report from Boston Consulting Group Inc. and secondary market dealer WatchBox has revealed that a basket of pre-owned watch models from top Swiss brands has outpaced the S&P 500 stock index in terms of average annual returns. Between August 2018 and January 2023, the S&P 500 recorded returns of 8%, while pre-owned watches saw growth at more than twice that pace.
Interestingly, prices for some pre-owned models, including Rolex Daytonas, Patek Nautilus, and AP Royal Oaks, declined by as much as a third since the market peaked in the first quarter of 2022, yet overall returns remained impressive.
The report also highlighted the performance of a basket of independent brand watches including FP Journe, H. Moser & Cie, and De Bethune – the latter being majority owned by WatchBox – which returned an impressive 15% over the same period. The report suggests that luxury watches make for a promising alternative asset class to more traditional investments like stocks, bonds, art, and wine.
It’s worth noting, however, that over a longer period, stocks have still outperformed watches as an investment asset. Between 2012 and 2022, the S&P 500 had a compound annual growth rate of 12%, while Rolex, Patek, and AP watches averaged 7%.
The pandemic saw a sharp acceleration in the growth of secondary-market watch prices, as Millennial and Generation-Z consumers, with more disposable income, discovered the luxury of collecting Swiss watches. Interestingly, the rise and fall of cryptocurrency values has also correlated with used watch prices.
Sarah Willersdorf, a managing director and partner at BCG in New York, suggests that value and transparency are the primary drivers of the secondary market, which has in turn led to increased liquidity. More than 60% of transactions were online compared to 15% for new purchases. While men still make up the majority of buyers, the number of female and younger collectors is growing rapidly.
WatchBox is one of the top sellers of pre-owned watches in the world, with operations in the US, Switzerland, and Hong Kong, and backers including former NBA great Michael Jordan and activist investor Bill Ackman. Boston Consulting Group and WatchBox co-funded the consumer research conducted for the report.
The secondary luxury watch market grew to $24 billion in 2022 compared to the primary retail market, which was worth $55 billion. The pre-owned market is expected to grow by 9% annually to $35 billion by 2026, as prices rise and more people begin collecting watches, according to a BCG forecast. LuxeConsult, an independent Swiss analyst and consulting firm, recently forecast that used luxury watch sales would overtake the primary retail market by 2033, with sales surging to $85 billion.
All in all, the report suggests that pre-owned luxury watches are a promising investment opportunity, especially for those looking for something a little different than the usual options.
Why are Rolex and Patek Philippe such good investment watches?
Heritage and Prestige
Rolex, Patek Philippe and Audemars Piguet are three of the most prestigious watch brands in the world. Both have a rich history and have been producing high-quality timepieces for over a century. Rolex is known for its innovation and technical advancements, while Patek Philippe is renowned for its complicated watch movements and exquisite design.
Rarity and Scarcity
Both brands have strict production processes, limiting the number of watches they make each year. This scarcity drives up the demand for their watches and increases their value over time. Additionally, some Rolex and Patek Philippe watches are made in limited editions or discontinued, making them even more rare and valuable.
Condition and Maintenance
Rolex and Patek Philippe watches are designed to last for generations with proper care and maintenance. The brands offer excellent after-sales service and guarantee the authenticity of their watches. Collectors prefer watches that are in excellent condition, increasing the value of those watches.
Global Recognition
Both Rolex and Patek Philippe are recognized globally as premium luxury watch brands. Their watches are often seen as status symbols and are highly sought after by collectors all around the world.
Should you invest in a Luxury watch?
Investing in a watch is a personal decision, and we recommend doing thorough research before making any investments. However, if you are looking for a luxury watch that has the potential to hold its value over time, Rolex and Patek Philippe are excellent options.
In conclusion, Rolex and Patek Philippe prove to be the best investment watches in the luxury market due to their heritage, scarcity, condition, and global recognition. Both brands have a proven track record of increasing in value over time, making them a smart investment choice for watch collectors and enthusiasts.
