More and more people looking to invest their money in profitable ventures are turning to collectible watches, commonly referred to as vintage watches, just like art, wine, or collectible cars, which have attracted a category of enthusiasts with investment ambitions.
This is understandable when observing the value appreciation of certain watches, especially from brands like Rolex or Patek Philippe. One can also mention, to a lesser extent, brands like Audemars Piguet, Breguet, or Omega.
The Evolution of the Collectible Watch Market Over Time
For those with little or no knowledge of this market, yet with an affinity for the product, it is important to take a step back and briefly review the evolution of the collectible market over time.
Initially reserved for a highly exclusive community of passionate collectors, it has become a field where casual buyers, knowledgeable collectors, amateur investors, and professionals now coexist. The "trendiness" of this market, which impacts prices and their recent surge for certain models, should not be overlooked.
One might wonder whether the recent evolution and expansion of this market make it more complex than before. It is also fair to ask whether the market has become inaccessible, given the record-breaking sales achieved by auction houses that the most foresighted among us could never have anticipated.
Here's the opinion of Fabrice Guéroux, expert: "For over 20 years, the value of many collectible watches has steadily increased, and the question has always been when this would stop. The rules are evolving, the dynamics are changing, and new players are entering the market. Nevertheless, values are climbing, and my belief is that they will continue to do so given increased demand, the emergence of new players, and above all, inherently limited production. It is crucial to approach this market prudently, thoughtfully, and analytically, trying to understand its evolution rather than focusing solely on the present. Focusing on auction house records is to look at pieces already out of reach for the average enthusiast. A significant portion of this market remains accessible today and represents considerable investment potential if approached with proper guidance."
Are Auction Records a Market Indicator?
Given the potential of this market, many major auction houses have turned to collectible watches.
Like works of art and collectible furniture, certain watches have demonstrated their ability to achieve astronomical returns, as evidenced by the results of the Daytona Ultimatum auction in Geneva in May 2018, where 32 Rolex Daytona watches were sold for just over $22 million.
While this is an all-time record for grouped sales of the crown-branded manufacturer, the records achieved over the past decade remain impressive.
Undoubtedly, collectible watches are among the rising assets and, in hindsight, one of the best portfolios to date. However, it is imperative not to focus solely on records set by auction houses.
Firstly, the watches involved in these records are not necessarily representative of the market; they may have belonged to a famous individual, have a special serial number, or possess a unique context or story. Secondly, some records are inherently inflated by auction house commissions and driven by buyer frenzy.
However, trends do emerge from certain auctions. It is undeniable that the record set by Paul Newman's Daytona watch (€15.3M this year) has had repercussions on all Daytona watches, whether they are Paul Newman's owned by "anonymous" individuals, the model 6263, the 16520, the Patrizzi, or even the 116520...
Our conclusion is that auction house records can provide market indications, but they must be used with caution.
How and How Much to Invest - Rules to Follow
Obviously, when investing in a timepiece, one must know which watch(es) to buy. The two safest bets for years have been Rolex and Patek Philippe, with Rolex leading in terms of volume...
It is also essential to consider which models are likely to yield interesting returns.
For Rolex, these are the Daytona, GMT-Master, and Submariner. For Patek Philippe, the Nautilus and some rare complications offer very attractive results. However, be cautious not to generalize— not all Submariner watches offer the same profit potential.
What makes a watch rare, beyond its market availability, is its condition and the state of its components, which determine its final value. It is worth noting that a 1969 watch with parts replaced over time by the manufacturer will not have the same value as a watch "in its original state," with no replaced parts and having had only one very careful owner...
Therefore, it is necessary either to be highly educated on the subject, which has become very technical, or to seek an expert. In this case, a renowned auction house or an expert in collectible watches will be ideal.
In any case, venturing into a purchase alone without fully mastering this field poses significant risks with many potential disappointments.
Leaving aside the risk of "fake" watches, there is the issue of watches with anachronistic parts, equipped with service dials, hands, or bezels— pitfalls that are difficult to avoid without expertise.
Building Your Portfolio
Building a portfolio depends on the means and objectives set. The adage about not putting all your eggs in one basket may not apply in a well-defined context.
The two main factors to consider, and on which we can advise you, are budget and the expected duration of your investment.
Some watches exhibit consistent upward trends, while others see their value rise much more quickly, the latter often influenced by auction house results (fashion phenomena, etc.).
The most important thing for anyone looking to build a portfolio of collectible watches is to know what they want to achieve and over what period. We are available by appointment to discuss this with you and present solutions that combine enjoyment with wealth management in a high-growth field.
