Op-Ed: Watches as Investments – The Case For and Against

Craig Karger is the owner of Wrist Enthusiast, which he founded in 2015. A Boston native, he has been collecting watches for over 25 years and visiting European Watch Company on Newbury Street for just as long.

I have been collecting watches for almost as long as I can remember and have been writing about them for nearly as long. In my group of friends, I am the “watch guy”. Ten years ago this meant that friends would come to me asking for advice on their next (or first) luxury watch purchase. “Should I go with the IWC Portugieser or a Rolex Datejust?” I would always lend my opinion, but watch purchasing is, and should be, a highly personal decision with no right or wrong choice.

In recent years, however, the questions from my non-watch friends have shifted. Instead of asking for my opinion on the quality of a watch or brand, or what I personally prefer, I started to get a variation of one single question: “will this watch go up in value?” Which brings us to the question: should anyone buy a watch as an investment? Truthfully, the answer is complicated and I can’t definitively say yes or no.

In order to answer the question, I have to backtrack a little bit. When did people start looking at watches as assets, like stocks or real estate? I would first point to the historic auction of Paul Newman’s Ref. 6239 Daytona that sold in 2017 for an incredible $17.75 Million USD (including auction fees). This set off a frenzy in collectors’ circles, and vintage Daytona prices (which were already selling well above retail) skyrocketed. Modern Daytona prices then started to climb, as did pretty much every stainless steel Rolex sport model, followed by the Audemars Piguet Royal Oak and Patek Philippe Nautilus.

During Covid, prices only got even higher. The federal government was handing out stimulus checks, people weren’t spending money on travel or restaurants, and Bitcoin and crypto prices (and yes NFT’s… cringe) were soaring. People put their money into cars, art, and, yes, watches. Demand far outweighed supply and prices increased across the board. Even watches that were never very popular, including two-tone models and pieces from small independents brands, all of a sudden were trading well above retail.

If you’ve been paying attention, you know now that none of this was sustainable. In our new “Post-Pandemic” reality, we have seen quite a large correction in the watch market, to the point where many pieces are now trading at, or below, retail. That being said, the watches that started it all, the steel Rolex Daytonas, GMT-Masters II’s, and steel Royal Oak’s and Nautilus’, are still way above retail. Does that mean we should view luxury watches as assets though? Yes and no.

I take my big watch purchases very seriously (and slowly). A year ago I bought a M.A.D. 1 Red, two years ago I bought a Rolex GMT-Master II Pepsi, and in 2018 I bought a Royal Oak Ref. 15400. Those are really my only notable purchases in the last 10 years. I bought these all at retail, because I am lucky enough to be “in the industry” and have at least a little access. And yes, I have bought other watches here and there in between, but none were major purchases where I had to think about the consequences of the price.

So, when buying these watches, did the fact that they were selling on the secondary market for multiples of what I paid for them factor into my purchase? You bet it did. But at the same time I bought these watches because I love them, plan to wear them regularly, and do not plan on selling them. There is something reassuring about buying an expensive luxury good and knowing that you can at least get your money out of it if you ever absolutely need to (and maybe even make a few bucks). Nobody wants to lay out tens of thousands of dollars on something only to lose half of its value as soon as you leave the showroom.

But the buying of watches as assets has, at least to me, gotten way out of hand. Buying a watch to flip the next day (or later the same day!) for double or triple the price has drained a lot of fun out of the hobby. Similarly brands that produce extremely limited $50,000 watches that only celebrities and the mega-rich are granted the opportunity to buy, and then watching these pieces sell for millions on the secondary market, can create some bitter collectors. To me, that’s not what the hobby is about and it is disheartening when it appears like a vast number of new entrants to the hobby only care about how much money they can make on a watch. Watches should be appreciated more for their history, finishing, and complications than for their current market value.

Peace of mind is always worth something, especially in an expensive hobby like watch collecting and I don’t fault anyone who takes future value into account when making their decision. I mean, I’ve done it on multiple occasions. But come on everyone, let’s not turn this hobby into something where the monetary value of our watches is the only thing we care about. That’s a lot less fun!