Luxury watches: Let time work for you

Timepieces with a long history

Watches — especially wristwatches — have been an important point of reference in people's lives and a status symbol at the same time for centuries. The invention of timepieces began around 4000 years ago in ancient Egypt, where the first sun, water and hourglasses were created. Around the year Mechanical clocks were then developed in 1335 And at the beginning of the 19th century, the industrial production of pocket watches began, which finally became a mass product. With the founding of Company Audemars, Piguet & Cie In 1881, the still young watchmakers Jules Louis Audemars and Edward Auguste Piguet began their success story by producing complicated pocket watches.

The first wristwatch for men, which is similar to today's models, was designed by Louis Cartier in France. In 1904, his friend Alberto Santo-Dumont, a well-known pilot, wanted a watch that would show him what time it was during his flight. During the First World War, the wristwatch boomed because it was more practical than pocket watches during war use.

Even though it visually had little in common with today's pilot watches with a distinctive bezel, with the Cartier Santos laid the foundation for one of the most successful watch categories of all time. Nowadays, almost every watch manufacturer has at least one pilot series in its repertoire.

Many watch series had their origins in professional and military use, as precise time information played a particularly important role in these areas. Over time, wristwatches also became established among the civilian population as a coveted status symbol, which was constantly being developed.

In the 1920s, the first automatic watch was invented; in 1926 Rolex made headlines with its waterproof Oyster case and in 1931 Rolex launched the Oyster Perpetual, the first self-winding watch, which replaced the annoying manual movement.

Blue Chips: The best collectors' watches

Because of its history, design and high quality, Rolex is still an important brand for enthusiasts, collectors and investors. But other luxury watches, such as those from Patek Philippe, Lange & Söhne, Audemars Piguet, Tudor, Omega and other blue chip brands, are also in growing demand.

For example, these collector's watches that make the hearts of enthusiasts and investors beat faster:

Popular classics such as the Rolex Submariner, Sea Dweller, Daytona, Explorer or GMT II are very suitable as investment objects, although the increase in value is of course unpredictable. But with the Rolex GMT-Master II Batman achieves excellent returns on investment: It is completely sold out and is so popular that the stainless steel models are traded for 250 percent above their list price.

Patek Philippe watches are considered the epitome of quality and investment. The intricately designed Swiss timepieces have an excellent reputation all over the world and are sometimes only sold to pre-selected customers. Since the company has produced less than a million watches since 1839, the range is both limited and difficult to access — ideal conditions for potential increases in value.

In addition to a brand name with appeal and a certain rarity value, technical refinements also play a role in investment watches. Watches with standard movements are usually less suitable as a capital investment. Special features of clockwork construction or additional functions (complications), on the other hand, pay off. The rule here is: the more difficult the complication, the more valuable the watch. “Perpetual calendars”, wristwatches with moon phase and percussion (repeater watches) and watches with tourbillon quickly reach prices in the five and six-figure range.

Luxury watches as an investment

Due to the turbulence on the stock markets and historically high inflation, tangible assets with a personal connection, such as wines, real estate or watches, are particularly in demand. They have a low correlation with the markets and are of excellent quality as a store of value or inflation protection. The secondary market also shows the real potential of watches. Coveted timepieces are often traded for many times the original new price.

Carefully selected luxury watches are so-called “sweetheart” investments with a high, emotional value, which can steadily increase in value if treated appropriately. The biggest price jumps within a year are usually expected from Patek Philippe, Rolex and Patek Philippe, such as the Ranking list from 2021 shows:

• 1st place: Patek Philippe Nautilus (+85 percent)
• 2nd and 5th place: Rolex Lady-Datejust (between +49 and +77 percent)
• 3rd place: Rolex Daytona (between +40 and +67 percent)
• 4th place: Omega Speedmaster Moonwatch Chronograph (+56 percent)

Opportunities and risks of investment watches

However, around 80 percent of all expensive wristwatches have no potential for appreciation. As a newcomer to the industry, it is therefore particularly important to deal extensively with the topic of luxury watches as an investment before buying. Because only with solid basic knowledge can you distinguish a counterfeit from an original and recognize attractive investment options.

You should also be aware that self-purchased luxury watches are also subject to ongoing risks and costs. This includes possible loss, theft or loss of value of the timepiece. Collectors also incur follow-up costs for the necessary maintenance, repairs and safe storage of the good items.

If you don't want to accept this effort or the risks, you trust better the expertise of specialized platforms, which offer both the selection of suitable investment watches, their proper storage and eventual sale at the best price. By tokenizing luxury watches (dividing them into digital shares), investors can create an attractive portfolio of tangible assets starting at just 500 euros and benefit from the return opportunities offered by the watch market.