Predicting the future direction of the value of a watch is a difficult science. Sean Li provides some helpful tips for collectors
Sean Li explores the challenges of predicting the future value of a watch
As the watch world pauses after the firsthalf onslaught of new watch introductions in Geneva and Basel, it’s time to reflect on a recurring theme: pricing. Since mid-january, when Switzerland’s central bank delinked the Swiss franc from the euro, watch brands have been trying to level off the pricing inequalities caused by currency fluctuations. There’s no doubt that sales in China have been particularly affected—on the mainland by the political climate and the numerous taxes placed on luxury goods, and in Hong Kong by our link to the US dollar, which has kept prices high in relative terms and driven some luxury brands to effect reductions. The demand is still there, though, and I don’t sense a lack of interest, certainly not in mechanical watches.
I’m still asked regularly which watches I would recommend as investments. It’s a question I generally dread, for I feel strongly that these mechanical marvels should be worn regularly to be truly appreciated. To see a watch come up for auction still in its delivery packaging is a shame, for that means it’s probably been lingering away in a safe. It also means the movement may have suffered from lack of activity and, on a philosophical
basis, that someone who would have enjoyed the watch on their wrist has been denied access to it.
However, I understand value is important, increasingly so, for although some prices have come down, the average price of a high-end mechanical watch has gone up very significantly in recent years. With that in mind, here are some guidelines for those considering their next purchase and who want to ensure the highest value retention.
First, bear in mind that there are no guarantees. Some brands do trend higher than others, but it’s impossible to say whether a particular watch will genuinely increase in value over the years. If anything, it’s watches that were shunned when new that now attract premiums. It’s perhaps due to their rarity, for these are watches that would naturally see their production numbers limited.
When considering new watches, you should look for highly and genuinely limited production runs, with numbers preferably in double or triple digits rather than so-called limitations in the thousands or more. They will be hard to come by, particularly if you’re not a regular client, but the chase is part of the attraction. The idea that particular brands retain their value better than others is only partially true; this just applies to certain models, and not to their entire collections, so you should be very wary.
For those who are looking at previously owned watches, whether at auction or otherwise, you have to consider the watch’s provenance and its history. Those with a story to tell, either of previous ownership or of how they came to be produced in the first place, can generate a higher return. In that sense, you could think of these timepieces as pieces of art, and you will need to be able to document their history and authenticity. You will also have to factor in the time and cost of having the watch inspected and possibly serviced once you’ve acquired it, for there’s no telling beforehand, unless professionally inspected, what the condition of the movement will be.
After you’ve acquired the piece, please don’t lock it away in a safe with your stock certificates and bonds. These miniature marvels of mechanical art need to live and breathe, and to accompany you through life’s adventures. You never know—your own travels may be what drives up its value over the years.
THE IDEA THAT PARTICULAR BRANDS RETAIN THEIR VALUE BETTER THAN OTHERS IS ONLY PARTIALLY TRUE; THIS JUST APPLIES TO CERTAIN MODELS
TIME IS GOLD What defines the value of a watch? Is it determined by currency fluctuations, the brand’s popularity, auction estimates or the model’s provenance?