How to Invest in Watches

For many people, exclusive watches are not just a tool for measuring the passage of time, but also a fashion accessory and a status statement. Increasingly, watches have also gained significance as an alternative asset class. In this guide, moneyland.ch answers the most important questions about investing in watches.

How are watches interesting from an investment perspective?

Some investors consider watches to be a reliable asset for achieving capital gains. According to the Knight Frank Luxury Investment Index, the value of fine watches has increased by 147 percent over the past ten years. Additionally, the prices of luxury watches have, in the past, been relatively unaffected by fluctuations in the stock market. During the coronavirus pandemic, for example, the prices paid for certain watches on the secondary market experienced exceptional increases.

What are the risks of investing in watches?

Because the right timepieces have the potential to gain in value, they can be used as one component in a diversified investment portfolio. The rule that higher potential returns come with higher risks applies to investment watches as well. Additionally, investing in luxury watches requires large amounts of capital. There is no guarantee that the value of a watch will increase. Before you invest in watches, you should either have a founded knowledge of the watch market, or you should consult with reputable experts. Ideally, you should enjoy collecting fine timepieces, so that you can still benefit from your watches even if you are unable to sell them at a profit.

Which watches are in demand?

If you want to invest in watches, you should look for models that are outstanding from a technical perspective and timeless from a fashion perspective. Watches which depend on fashion trends for demand are not suitable for long term investments. The watches listed below have historically been in strong demand over long periods of time:

• Rolex Daytona
• Rolex Submariner
• Tag Heuer Carrera Calibre 6
• Panerai Bronze
• Omega Speedmaster
• Jaeger-LeCoultre Reverso
• Audemars Piguet Royal Oak
• Watches from A. Lange & Söhne
• Patek Philippe Nautilus

Vintage watches are also popular among investors. These are popular watches that are no longer manufactured. In this case, the investment value depends on limited supply to drive up the watch’s value. The Rolex Daytona Paul Newman John Player Special Dial is one example of an investment-grade vintage watch. According to the Knight Frank Luxury Investment Index, watches of this make gained in value by 571 percent between 2013 and 2023.

Where can I buy investment-grade watches?

If you are interested in purchasing new watches to keep as an investment asset, it is advisable to buy from certified dealers. This minimizes the risk of your purchasing counterfeits. However, purchasing certain watches new can be an exercise in patience. In order to artificially boost the value of watches, many manufacturers limit the supply of their exclusive watches. As a result, consumers have to sign up to waiting lists for certain models. The waiting period for popular Rolex models, for example, can be up to several years.

Second-hand watches, in contrast, can be purchased immediately. Buying on the secondary market has the unique advantage that you may encounter rare watches that are no longer manufactured. Second-hand watches can be purchased at auction houses like Sotheby’s and online via platforms like Chrono24, Chronext, and Watchmaster. These platforms certify the authenticity of the watches being sold. There are also established Swiss watch dealers like Bucherer that sell used watches.

You should exercise caution when buying watches directly from private individuals. It can be almost impossible to tell a good counterfeit from an original without a special examination.

How should I store investment watches?

If you hope to resell a watch for a profit, you must make sure that it remains in a perfect condition. The original box in which a watch is sold is generally suitable. Your storage space should be free from the following hazards:

• Dust
• Light
• Heat
• High atmospheric humidity

For semi-automatic watches, it can be helpful to store the watch in a watch winder.

It is also important to store valuable watches in a safe place. Getting a suitable safe is advisable, but also adds an investment cost. Alternatively, you can store investment watches in a bank safe deposit box, in which case you should account for the ongoing fees.

How can I insure may investment watches?

Watches are generally covered by Swiss household insurance. However, it is important to make sure that your policy’s sum insured covers the full value of your collection, plus the rest of your personal property. The insurance for simple theft away from home which you can get with household insurance generally has much lower coverage. Insuring watches individually with valuables insurance can make sense for exceptionally valuable watches.

It is important to note that both household insurance and valuables insurance limit burglary coverage for watches that are not locked in an eligible safe when the burglary occurs. Normally, a safe must weigh at least 100 kilograms or be professionally built into the masonry to be considered eligible.

Are there other ways to invest in watches?

• Stocks: Many watch manufacturers are listed on stock exchanges, making it possible to buy shares in these companies. Examples include the Biel-based Swatch Group and Japanese watchmaker Seiko. Stocks can potentially deliver high returns, and you may also receive dividends. The disadvantage is that there is also a high risk that a company could lose value. You can buy shares of companies in the watch industry using a stock brokerage account. You can compare brokerage accounts from Swiss banks using the online trading comparison on moneyland.ch.  
• ETFs: There are currently no exchange traded funds (ETFs) that invest exclusively in watches or the watch industry. However, there is at least one ETF – the Amundi ETF S&P Global Luxury UCITS ETF (ISIN: LU1681048713) – that invests exclusively in the luxury goods sector. But that ETF invests using swaps. ETFs invest in many different companies, so the risk of loss is lower than if you invest in individual stocks. However, an ETF that covers just one industry sector is fully dependent on developments in that one market. You can buy shares in ETFs using a stock brokerage account.
• Actively-managed funds: There are actively-managed funds that invest in the watch and luxury goods sectors. However, these funds often have much higher fees than passively-managed funds like ETFs.

More on this topic:
How to invest money in Switzerland
Passively-managed vs. actively-managed funds