👋🏼 everyone,

I haven't worn a watch since I was around ten years old. 

I can still picture it vividly - a little dinosaur face with a blue strap. I treasured that watch; it made me feel grown-up, even accomplished, as if it expressed exactly who I was, despite being just a ten-year-old.

By my teens, though, I had given up wearing any kind of watch. Like many teenagers, I probably wanted to blend in as much as possible, avoiding anything that might draw attention, and a watch somehow didn’t fit that plan.

Now, in my 30s, I occasionally flirt with the idea of buying a watch again.

As you’ve probably heard me say before, I’m a firm believer in diversification - not just across investments like stocks or real estate but also within the collectibles space. While my current collectibles focus mostly on art, I’ve been exploring other options that could add value to my portfolio.

That’s why this investment guide on watches was a fun one. It wasn’t just nostalgic - it reignited my interest in wearing a watch again. But this time, I’m thinking strategically: not just a timepiece, but one that could grow in value over time.

Let’s break it down!

I’m going to cover:

1. Why even invest in a luxury/collectible watch?
2. State of the luxury watch market 📈
   • Past $ returns
   • Watch market indices 
3. How much does it cost to invest in a watch? 💸
4. Factors that determine the value of a watch
5. What are the main ways investors buy watches and how to get started
6. Risks to look out for?
7. Tax implications of watch investing
8. Top resources + influencers in the luxury watch space

Why even invest in a watch?

First, let's take a long-term historical look at the luxury watch space versus the stock market - as you'll see, luxury watches have over a decent chunk of time performed very well.

Take, for example, pre-owned Patek Philippe Nautilus models, which went up by 150% from 2019 to 2022, or Rolex Daytonas, which saw a 60% increase over the same period. 

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As of 2024, the luxury watch market is valued at $49.8 billion and expected to grow about 2.25% annually through 2028. 

This said, more recent data shows prices have been steadily falling for two straight years, since 2021/22.

However, today prices seem to be stabilizing and some are saying that we have reached the bottom, which if true, begs the question, is now a good time to jump back in and make some very healthy profits?

This (stabilization claim) seems to be backed up also by Bloomberg’s index of the 50 most popular watches on the secondary market edged up 0.1 percent in September after two years of decline.

And there's more data from Asia contributing to this optimism: a trend toward luxury watches as investment pieces, driven by their potential to hold or appreciate in value. More than 30 percent of consumers in Hong Kong expressed interest in buying watches as a hedge against inflation, suggesting a shift towards viewing luxury timepieces not only as status symbols, but also as strategic financial assets.

Outside of the long term healthy returns, why else might you want to invest in a timepiece?

Diversification: watches as an investment asset

Adding watches to your portfolio can be a great way to diversify. 

Unlike stocks, which can swing with the market, watches are tangible assets that can hold their value even in economic downturns. 

With watches priced in various currencies, they can act as a hedge against inflation and currency fluctuations.

Portable and easy to store

You can wear them, keep them in a safe, or even pass them down through generations.

Unlike other valuable items, watches are easy to move around, whether you’re traveling or just want to store them securely at home.

What makes them especially appealing is how simple they are to manage.

A watch doesn’t take up much space, doesn’t require much maintenance beyond occasional servicing, and can easily go from one place to another without losing value. Whether you’re on the move or just stashing it for a rainy day, it’s one of the most hassle-free ways to carry an asset that’s both functional and valuable.

Outperforming in tough times

Watches also show surprising resilience during economic crises. 

They’re generally less tied to stock market ups and downs, so they can be more stable in tough times. 

For instance, luxury watches dropped only about 8% in value in 2022 during the COVID pandemic, while the S&P 500 fell by 19%.

State of the Luxury Watch Market

As I’ve already mentioned they’ve seen remarkable growth over a decade.

According to the Knight Frank Luxury Investment Index, watches have shown an impressive average 10-year ROI of 147%, coming in right after wine and rare whiskey as top collectibles.

As of 2024, the luxury watch market is valued at $49.8 billion and expected to grow about 2.25% annually through 2028. 

This rise is fueled by a worldwide love for quality, high-end watches made with premium materials like steel, bi-metal, and precious metals, which add durability and a bit of status.

Watch Market Indices 

A watch market index is like a "scoreboard" for the watch industry, tracking the prices or popularity of luxury and collectible watches over time. It’s a tool that shows whether watch prices are going up, down, or staying steady.

How it works:

• What it tracks: The index focuses on a group of specific watch brands and models, like Rolex, Patek Philippe, or Omega. These are often the most sought-after in the market.
• How it’s calculated: Data is gathered from auction sales, resale platforms, and other market sources. The index combines this info to show overall trends.
• Why it’s useful:
  • For investors, it helps gauge whether watches are a good alternative asset.
  • For collectors, it shows which watches are gaining or losing value.
  • For sellers, it helps set competitive prices.

Think of it like the S&P 500 for watches. Instead of tracking company stocks, it tracks luxury watches!

Here are four of the most notable watch market indices, with a strong focus on the U.S. market:

WatchCharts Overall Market Index

• What It Is: Tracks the resale prices of 60 highly traded luxury watches from brands like Rolex, Omega, and Audemars Piguet.
• Why It’s Popular:
  • It provides a comprehensive view of the luxury watch market.
  • Aggregates data from platforms like eBay and Chrono24 for reliability.
  • Ideal for investors and collectors looking to gauge the market’s health.
• Unique Feature: Tracks trends across multiple brands, not just Rolex.

WatchBox Watch Market Index

• What It Is: A proprietary index created by WatchBox, a major U.S.-based platform for pre-owned luxury watches.
• Why It’s Popular:
  • Focuses on top-tier brands like Rolex, Patek Philippe, and Audemars Piguet.
  • Offers insights into the pre-owned luxury market, especially in the U.S.
• Unique Feature: Known for transparency and its focus on resale dynamics.

Chrono24 Watch Index

• What It Is: A global tracker with significant U.S. market data, analyzing resale prices and demand on Chrono24.
• Why It’s Popular:
  • Helps collectors monitor their collection’s value.
  • Tracks trends for specific models like the Rolex Submariner or Omega Speedmaster.
• Unique Feature: Interactive tools for watch owners to evaluate individual timepiece performance.

Bob’s Watches Rolex Market Index

• What It Is: Exclusively tracks Rolex resale prices in the U.S. market.
• Why It’s Popular:
  • Rolex is the most traded luxury brand, making this index vital for enthusiasts and investors.
  • Focuses on model-specific trends like the Daytona, Submariner, or Datejust.
• Unique Feature: Rolex-specific insights from a trusted U.S.-based retailer.

💰 How much does it cost to invest in a watch?

A question that often comes up for aspiring watch investors is, “How much should I really spend on a watch?”

The answer isn’t one-size-fits-all; it depends on your budget, goals, and taste.

First, stick to what you’re comfortable spending - never invest more than you’re okay with potentially losing. Value is key here, so prioritize watches that feel worth it to you.

For a quality entry-level Swiss mechanical watch, you’re looking at spending around $1,000 to $3,000. If you want something a bit more refined, mid-range options can range from $5,000 to $10,000 or a bit higher.

Beyond that price point, you’re often paying for the brand’s prestige as much as the watch itself. That’s totally fine, but it’s good to be aware of what you’re really buying.

Remember, a higher price doesn’t always equal higher quality. Some watches might be overhyped or overpriced, while others could be hidden gems. So, do some research—compare prices from places like authorized dealers, the secondary market, and even auction houses.

Lastly, consider the extra costs that come with owning a watch, like insurance, servicing, repairs, and storage. These can add up over time and impact your overall return.

For an investment-worthy watch, how much money do I need to spend?

A question that often comes up for aspiring watch investors is, “How much should I really spend on a watch?” The answer isn’t one-size-fits-all; it depends on your budget, goals, and taste.

First, stick to what you’re comfortable spending - never invest more than you’re okay with potentially losing. Value is key here, so prioritize watches that feel worth it to you.

For a quality entry-level Swiss mechanical watch, you’re looking at spending around $1,000 to $3,000. If you want something a bit more refined, mid-range options can range from $5,000 to $10,000 or a bit higher.

Beyond that price point, you’re often paying for the brand’s prestige as much as the watch itself. 

That’s totally fine, but it’s good to be aware of what you’re really buying.

Remember, a higher price doesn’t always equal higher quality. 

Some watches might be overhyped or overpriced, while others could be hidden gems. So, do some research - compare prices from places like authorized dealers, the secondary market, and even auction houses.

Lastly, consider the extra costs that come with owning a watch, like insurance, servicing, repairs, and storage. 

These can add up over time and impact your overall return.

Factors that determine the value of a watch

Scarcity

Limited edition watches are in high demand, especially on the secondary market. When there’s more demand than supply, prices often go up. Take, for example, a Patek Philippe watch—a limited edition model with top-tier materials can take about eight years to craft, making it rare and, naturally, pricey.

Authenticity

If you want your watch to actually appreciate in value, make sure it’s authentic. This goes for both new and used watches. And if you’re buying a secondhand piece, double-check that any replacement parts are also genuine.

Brand

When choosing a watch for investment, the brand is everything. Big names like Rolex, Patek Philippe, and Omega tend to hold their value well. But don’t overlook independent brands like Philippe Dufour or F.P. Journe—they can offer top-quality pieces too.

The Material of the Watch

Some watches are considered “complicated” because they have features like split-second timers, perpetual calendars, or ultra-flat designs. These special traits, combined with materials like stainless steel or titanium, make these watches valuable and great for any collector looking to invest.

Age and Condition

It’s not always about getting a brand-new watch. A vintage, pre-owned watch in great condition can often be more valuable than a new one—especially if it’s from a well-known brand. For example, a Rolex Paul Newman Daytona from 1968 can sell for over $300,000 at auction houses like Sotheby’s. Not bad for a used watch!

Fashion Trends and Design

A watch’s value can be influenced by design and fashion trends. For instance, if a celebrity sports a certain watch at a major event, it can drive up its value. But, if that trend fades, so might the watch’s worth.

How to get started  

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Study the Watch Market

Predicting how watches will perform in the future can be tricky, so it’s smart to do your homework. Keep an eye on the luxury watch market and track the value of the pieces you’re interested in. I’ve mentioned a few resources below.

Consider Your Budget and Investment Goals
Watches tend to be better long-term investments, so if you're after something that gives quick returns, they might not be your best bet. It's also important to stay within your budget—only invest what you’re comfortable with. And it’s always a good idea to invest in a watch you actually like, so if it doesn’t increase in value, at least you’ll still enjoy it.

Pick Brands With a High Resale Value
When choosing a watch to invest in, go for brands known for holding or increasing their value over time. Big names like Rolex, Patek Philippe, Audemars Piguet, and Omega are a safe bet. For instance, the Rolex Daytona has an MSRP of around $13,150, but you’ll see it selling for about $40,000 on the secondary market.

Decide Where to Buy and Sell Investment Watches
Buying new watches directly from the manufacturer is usually the way to go, especially for modern pieces. But if you’re after a vintage one, reputable dealers like the European Watch Company are a good place to start. Auction houses like Sotheby’s and Christie’s are also prime spots for buying and selling high-value watches. Don’t forget about the pre-owned market, where sites like eBay and Chrono24 offer a wide range of options.

Arrange Proper Storage
To keep your watch in top condition, store it somewhere dry and out of direct sunlight—especially if it has a leather band. The ideal storage spots include watch boxes, pouches, rolls, or a drawer. If you own automatic watches, consider using a watch winder to keep them ticking smoothly.

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What are the main ways investors buy watches and how to get started:

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When it comes to buying watches, there are two main players in the game: Authorized Dealers (ADs) and independent merchants. Let’s break it down.

Authorized Dealers (ADs)

These are the official sellers. Authorized Dealers have a direct partnership with watch brands, selling only their watches. Some ADs stick to one brand, like Rolex, while others offer a mix.

Think of buying from an AD as the watch equivalent of “retail shopping.” They get the latest inventory as it’s released. But here’s the catch: just because they have stock doesn’t mean you can buy it. ADs play hard to get - they often reserve their inventory for their VIP clients, the loyal buyers who’ve built a relationship with them over years.

Take Bucherer in New York, for example. They’re one of the most well-known Rolex Authorized Dealers. But don’t expect to walk in and snag a Daytona or Submariner off the shelf. Showings are often by appointment, and unless you’re on their exclusive VIP client list, those coveted pieces are out of reach.

In recent years, watch brands have been leaning toward monobrand distribution, tightening their control over how their products reach customers. This isn’t just about offering a premium experience, it’s also a smart way to boost profits.

Independent Merchants

On the flip side, you’ve got independent dealers, who specialize in pre-owned watches. These dealers are your go-to if you’re not willing to play the AD waiting game.

A quick Google and you'll find major ones, but as a starter for ten:

Bob's Watches

One of the most reputable names in the pre-owned Rolex market, Bob's Watches is famous for its transparent pricing model. They openly list both buying and selling prices, which has earned them trust among collectors.

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Crown & Caliber

Crown & Caliber is a major player in the pre-owned luxury watch market. They offer a wide range of brands, from Rolex to Omega and Patek Philippe, and have a solid reputation for authenticity and customer service.

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Watchbox

WatchBox is a global leader in pre-owned luxury watches, with a strong presence in the U.S. They specialize in buying, selling, and trading high-end timepieces and provide a seamless online and in-person experience.

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Tourneau

Though they carry new watches, Tourneau also offers a robust selection of certified pre-owned watches. Their extensive network and long history in the industry make them a go-to for many collectors.

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Marketplaces 🫱🏽🫲

Chrono24 is one of the largest global marketplaces for buying and selling luxury watches.

It allows both private sellers and dealers to list watches, offering a huge selection across various high-end brands. Buyers don’t pay any additional fees beyond the listed price and shipping costs. For sellers, Chrono24 charges a commission of 6% on each sale, with additional listing fees for dealers. They offer secure payment systems with buyer protection, ensuring safety for both parties during transactions.

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Also you eBay still works wonders and they've introduced their Watch Authenticity Guarantee program where watch experts are inspecting and vetting select pieces (look for the blue checkmark).

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Private sales

Private sales can be a great option if you’re looking for a more personal, no-middleman experience when buying or selling watches. It’s all about direct negotiations, usually between collectors, and often results in better deals for both sides. The key is building trust, so make sure to do your research and verify the watch's authenticity.

For finding private sales, Reddit is a goldmine. Subreddits like r/WatchExchange are popular spots where enthusiasts buy, sell, and trade watches with clear guidelines to protect both parties.

There are also Facebook groups and other online communities where collectors gather to discuss and transact watches. Just be sure to engage with reputable members and ask plenty of questions before pulling the trigger.

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⚠️ Risks to look out for?

When buying luxury watches, especially online, one of the biggest risks is misrepresentation.

This can happen when a seller inaccurately describes the condition, model, or age of a watch.

It's important to get clear, detailed photos of the watch from all angles, including the dial and caseback, and even the movement for vintage pieces. Without these, it’s hard to verify the authenticity and condition of the watch. If the seller can't provide these photos or refuses to open the caseback, that’s a huge red flag.

Another common risk is the lack of proper documentation. Make sure the serial numbers and model numbers on the watch match those on any papers or warranty cards that come with it.

If the seller can't provide proper documentation or isn't willing to verify this, it’s a warning sign that the watch might not be as it seems. Additionally, ask about after-sales support and references from previous customers to confirm that the seller is trustworthy.

Functional issues are harder to spot without a hands-on inspection, so be cautious of watches that claim to be in perfect working order without offering a return policy or warranty. Even modern watches used in active lifestyles may have unseen damage, so it's important to do your homework. Understanding the watch you're buying and researching the brand can go a long way in avoiding costly mistakes and spotting misrepresentation before it happens.

Lastly, always be wary of deals that seem too good to be true. Counterfeit watches often pop up online, especially at prices well below market value. If you spot a watch selling for half the typical price, it’s a clear sign that something’s off. Do your research on normal resale values to spot these red flags early.

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Tax implications of watch investing

When it comes to selling a watch as an investment in the U.S., there are a few tax implications to consider.

If you sell the watch for a profit, you may owe capital gains tax, which applies to the difference between what you paid for the watch and what you sold it for. The rate of this tax depends on how long you've held the item - if it's over a year, it could be subject to long-term capital gains, which typically has a lower tax rate. If you’ve held it for less than a year, short-term capital gains tax applies, and that’s taxed at your ordinary income rate.

A couple of important things to keep in mind: the IRS considers watches as "collectibles" in many cases, which could mean the capital gains tax rate is higher - up to 28% instead of the usual long-term capital gains rates. Also, any losses you incur on the sale may be deductible, but only if you're dealing with investment property and not personal use items.

For a deeper dive, check out IRS Publication 550 on investment income and expenses, which can give you a clearer understanding of how to treat collectibles like watches when it comes to taxes.

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Who to follow in the luxury watch investment space 👀

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Resources for Watch Investing

If you’re thinking about getting into luxury watch investing, a few key sites can really help.

Hodinkee is packed with expert articles and market insights, covering everything from vintage pieces to the latest trends, so it’s perfect for learning the ropes. WatchCharts on the other hand, gives you real-time price data and trends, helping you track how specific watches are performing over time.

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Watch influencers

Kevin O'Leary
Known for his role on "Shark Tank," Kevin O'Leary is also a passionate watch collector and investor. He frequently shares insights about watch investing on social media and in interviews

Ben Clymer
As the founder of Hodinkee, Ben Clymer is a highly respected figure in the watch industry. I loved this video from a few years back on how to build a watch collection.

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And that's it - I hope I've left you feeling inspired!

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Jason

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DISCLAIMER: None of this is financial advice. Finbrain is strictly for educational purposes.

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