You did very well when you bought Microsoft shares for $10,000 USD in the 1980s, and still have them today (or sold them at their peak in December 1999). You also did well when you bought a couple of Rolex Daytona watches for the same amount of money in the 1980s, when nobody wanted them. But I sometimes dream about having put money on Microsoft in the 1980s in this case. It would buy you a couple of vintage hand-wound Daytona watches and still have change left.
So, let’s end the “investment” part of collecting watches right here. A better question to ask is whether a watch will – at least – retain its value. Only a few of us can say that they are the first owner of a 1970s Rolex Daytona or Submariner with plexi crystal and full box set. Most of us bought these vintage watches since they are considered to be cool again, so somewhere during the last 10-15 years.
A question we often receive is which watches would retain their value in the years to come. For modern watches, that is a difficult question to answer as the obvious Geneva watchmaker produces much more watches than they did in the past and, of course, with modern materials like ceramics, sapphire, silicon and so on. So besides that they are not that exclusive in terms of production numbers, their appearance will also stay the same in decades to come, where vintage Rolex watches these days earn some of their demand with the fact that they aged nicely with brown dials, grey faded bezels and dial-magnifying plastic crystals.
Having said that, a stainless steel Rolex might still be a safe bet as the Geneva house increases their prices annually and immediately the prices of their pre-owned watches also go up accordingly. So after just a few years, instead of depreciation, you will see that the value of your Rolex is on par or perhaps even above the price you paid for it when new.
Exclusive and limited edition watches
There is an entire world besides Rolex of course, and Rolex is not the best example to refer to when comparing other brands. If you do not have an interest in Rolex watches, you might want to focus on a watch that has been produced in limited numbers. A watch that is somewhat exclusive will have a higher chance to retain its value, although watches that are really exclusive might have to cope with the fact that something infamous also makes it unwanted or unloved. However, a watch that has been made in small series might be an interesting purchase. Certain watches that are marked as “limited edition” might do very well among collectors of that brand.
Watches that have a limited production (but are not a specific limited edition), such as the Audemars Piguet Royal Oak 15202 or Patek Philippe Nautilus 5711/1A are known to have a very strong resale value, especially over time. Even young pre-owned models (5-10 years old) could have a market value higher than the original price tag. It is most probably the case that these prices will even go up in the future.
With regards to vintage watches, you will notice that the prices are relatively high for all vintage watches that fall in the demand for specific models. Chronograph watches based on Valjoux 72, for example, are fetching high prices solely based on the popularity of that movement amongst collectors, and not based on the brand name on the dial. Keep in mind that the (technical) condition of a watch is very important, besides its authenticity. Everyone can go on-line and see going prices of watches on Chrono24, eBay or even in the results of auction houses and immediately is of the opinion that the watch he or she found in their attic is worth the same.
Not every vintage timepiece means that it is worth gold. Authenticity is extremely important to collectors, if an incompetent watchmaker has swapped the dial, movement parts, hands etc. of the watch somewhere in the last few decades, it can become pretty much worthless in a worst case scenario. It would not only take too much money to invest in a timepiece to make it ‘valuable’ again, in a lot of cases it is also simply impossible to buy original parts.
On the positive side, vintage watches are hotter than ever. Prices that might seem a bit at the high-end for a watch – let’s say a vintage Breitling or Omega – don’t have to be a showstopper. If it means that the watch is authentic or perhaps even complete with box and papers, you might want to consider buying it anyway. With the current interest in pre-owned and especially vintage watches, it will probably reach that higher price tag in a few months or years from now anyway. Some might say it is wiser to accept the higher price and at least have the timepiece than finding out in a couple of years it has become impossible to find or to afford.
Whether you are after a vintage watch or a watch that only had a limited production run, make sure to educate yourself on the topic. Become a subject matter expert when retaining the initial investment in a watch means the world to you.