Luxury watches as an investment: bubble or elite game?
Luxury watches as an investment: a look at the 2022 bubble, the dealers' game, hidden costs and alternatives like the Vostok, which tripled in value.
English · Original discussion in Spanish · Published
Luxury watches as an investment: opportunity or mirage?
Are luxury watches a smart investment or a trap for the naive? The reality, as almost always, lies somewhere in the grey. Those who defend Rolex, Patek and Audemars Piguet as assets point to the huge upward run during the 2022 bubble, when some models doubled their value on the secondary market. But that peak was not normal: even AliExpress watches had multiplied in price. Today, with the correction, the picture is more complicated.
The dealers' game: how to get a Rolex at list price
Access to the most coveted models (Submariner, Daytona, GMT, etc.) is controlled by official dealers. Most receive barely two Submariners a month and two steel Daytonas a year. To qualify for one, signing up on a list is not enough: you first have to buy the watches the store wants to sell: rose gold Datejusts for the couple, less in-demand steel models... Those who play that game can get the coveted piece in six months; those who don't wait 20 months or more. Exclusivity is a customer filter, not a favour.
Investment or speculation? The hidden costs
Part of the analysis is blunt: watches are not an investment, but a form of speculation with high opportunity costs. To make money, you need to buy at retail price (which requires contacts or years of prior purchases) and sell quickly on the second-hand market. But you have to deduct insurance, regular servicing, taxes on the sale and the uncertainty of fashion changing. Those who see a Rolex as a liquid 'travel insurance' run into reality: a Rolex does not turn into cash on any street corner, and wearing one in certain places is an invitation to be mugged.
Low-cost alternatives: Soviet and Japanese watches
Where there really are returns with little money invested is in the niche off the radar. Watches like the Vostok Amphibia, bought a decade ago for a handful of euros, have today tripled in value thanks to the war in Ukraine and sanctions on Russia. Brands like Seiko, Citizen or Orient offer robust movements and a growing collector base. The percentage appreciation can be brutal, even if the absolute price remains modest. Another option: raw gold or diamonds, easier to transport and with a perpetual market.
The conclusion is that the watch market as an investment is reserved for the well connected (those with access to exclusive pieces and fast sales channels) or for those willing to take the risk of playing in the 'lumpen scale' of smuggling. For everyone else, the best watch investment, as the sceptics point out, is not to make one at all.
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Are luxury watches a smart investment or a trap for the naive? The reality, as almost always, lies somewhere in the grey. Those who defend Rolex, Patek and Audemars Piguet as assets point to the huge upward run during the 2022 bubble, when some models doubled their value on the secondary market. But that peak was not normal: even AliExpress watches had multiplied in price. Today, with the correction, the picture is more complicated.
The dealers' game: how to get a Rolex at list price
Access to the most coveted models (Submariner, Daytona, GMT, etc.) is controlled by official dealers. Most receive barely two Submariners a month and two steel Daytonas a year. To qualify for one, signing up on a list is not enough: you first have to buy the watches the store wants to sell: rose gold Datejusts for the couple, less in-demand steel models... Those who play that game can get the coveted piece in six months; those who don't wait 20 months or more. Exclusivity is a customer filter, not a favour.
Investment or speculation? The hidden costs
Part of the analysis is blunt: watches are not an investment, but a form of speculation with high opportunity costs. To make money, you need to buy at retail price (which requires contacts or years of prior purchases) and sell quickly on the second-hand market. But you have to deduct insurance, regular servicing, taxes on the sale and the uncertainty of fashion changing. Those who see a Rolex as a liquid 'travel insurance' run into reality: a Rolex does not turn into cash on any street corner, and wearing one in certain places is an invitation to be mugged.
Low-cost alternatives: Soviet and Japanese watches
Where there really are returns with little money invested is in the niche off the radar. Watches like the Vostok Amphibia, bought a decade ago for a handful of euros, have today tripled in value thanks to the war in Ukraine and sanctions on Russia. Brands like Seiko, Citizen or Orient offer robust movements and a growing collector base. The percentage appreciation can be brutal, even if the absolute price remains modest. Another option: raw gold or diamonds, easier to transport and with a perpetual market.
The conclusion is that the watch market as an investment is reserved for the well connected (those with access to exclusive pieces and fast sales channels) or for those willing to take the risk of playing in the 'lumpen scale' of smuggling. For everyone else, the best watch investment, as the sceptics point out, is not to make one at all.
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Summary of a discussion on Burbuja.info - Foro de economía, actualidad y política., translated from Spanish and reviewed before publication. Read the full discussion (45 replies).
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