Editor’s note: One of the questions we constantly get asked is about watches as investments. And while there’s no doubt that watches are being increasingly seen as a viable category for investment, In this piece originally written last year Sandra argues that it’s not a path you should go down — especially with new watches. Read on.
Being in the watch writing line of work, it’s no great surprise that friends and acquaintances often ask me for watch-buying advice. Call it an occupational hazard, call it a compliment that they should consider my advice worth seeking, but (unlike a doctor friend, who gets irritated by being asked for free clinical advice at dinner parties) I never tire of talking about watches.
But something has changed: as watch auction prices have gone relentlessly up over the past few years (not to mention the retail prices of many brands), the two questions I’m most often asked are: “I’m tossing up between an X and a Y [pick any two modern watch brands]. Which one is going to hold its value better?” And: “I’d like to buy vintage and I can’t afford a Daytona or a Patek, so which other brands would make the best investment?”
(To clarify: these are people with around $10,000 to $30,000 to spend. Not $100,000 plus – that’s a different planet.)
Those two questions are essentially the same one in different clothes – and my answer to both is: “Stop. You’re asking the wrong question.” Not because I don’t have a crystal ball (I don’t) but because I believe the whole approach is wrong – and a short road to disappointment.
Why do we buy fine wristwatches? To tell the time, sure – and a flick of the wrist is more elegant and efficient than digging a phone out of our pocket. But that’s the least of it. We buy them because they are beautiful, fun, technically intriguing, and an expression of personal style – like our cars, shoes, wallets or pens.
Do we choose those things based on their resale value? Well, cars – yes, to a degree. An Audi tends to lose a bit less than, say, a Chevrolet. But if you’re an Audi rather than a Chevy person it’s for a lot of reasons besides resale, including the greater pleasure of driving it.
Aurel Bacs – who is as responsible as anyone for the huge prices being achieved by some watches at auction – has this to say: “I buy proper handmade suits [which no doubt cost more than some timepieces] but I have never thought to ask the tailor how much I could get if I sold it. To me the profit is my daily pleasure of having enriched my life with something beautiful that has soul, quality, charm – and yes, it even serves a purpose. So why on earth does the watch business have to be measured by ‘How much will I make if I sell it in a year from now?’ – or even ‘Will I get my money back?’”
I’m with Aurel on that one. Here’s another way to look at it: the first Chanel jacket I ever bought – more than 25 years ago – was hugely expensive in relation to my meagre salary. But I called it investment dressing: first, there was the pleasure principle (the cut, the fabric – it felt so good to wear) and second, because I loved it so much, I wore it a lot. Divide the cost of purchase by the number of wears et voilà – great ROI. (I still have it, by the way, and still occasionally wear it; now it has the cachet of being vintage.)
Over to Juan-Carlos Torres, recently retired CEO of Vacheron Constantin: “I think we are in a mess … a lot of people will be disappointed in the future at the real value of their watch. If someone came to me with a regular watch from our new collection and asked me what its resale value is, I would say, ‘Let’s put it on the scales and see how much gold there is inside. That’s the only value I can guarantee. The rest? Wait 20, 30, 50 years and let’s see then’.”
That’s not to suggest there’s anything wrong with Vacheron’s pricing – just that, as Torres says, a regular watch is not extremely rare; it doesn’t have a unique story. A Ferrari GTO is worth about $50 million these days; a 458 comes nowhere close (it loses value the moment it leaves the showroom). Why? Ferrari made a handful of GTOs and about 10,000 of the 458. That’s why the Patek 1518 fetched $11 million and you won’t get your money back for a run-of-collection modern Nautilus. It’s common sense.
This is not to say that only an exceptionally rare (vintage or modern) watch has any potential for financial return on investment. But the watch market is not the stock market. Heck, it’s not even the real estate market. The potential for quickly ‘flipping’ at a profit is virtually non-existent.
And so, it you’re contemplating a watch, do your homework on the price (of course) and then ask yourself if you will really, truly love wearing it. As long as you can afford the difference between, say, $10,000 and $15,000, the money doesn’t matter. And then enjoy the three or four decades of pleasure that you will have until the watch (with luck) appreciates in value.