Reaping the Benefits

The appeal of luxury watches in undeniable, but finding true investment-grade timepieces can be a minefield. Sean Li explores some of the criteria to look for to maximise the value retention potential of your next purchase

s a watch collector, I’m honoured when acquaintances approach me for advice on their next purchase. I usually start by asking if they have any favourite brands, or if there are any specific watches that have caught their eye, so that I can gauge on an aesthetic basis what might interest them. There is, however, almost always an underlying criterion: which watch will be the safest investment? This is actually the most difficult part, because it’s one aspect where I can only make an educated guess on a specific watch’s future value. While watch aficionados will tell you to buy what you like that’s within your budget, and to enjoy and wear it, the fact remains that it is an important consideration. We all want to select watches that will, at the very least, retain as much value as possible. Here are some guidelines to follow. It starts with the selection of a new watch, which in itself has become a tough decision. The market has grown to such an extent in recent years that we are truly spoilt for choice; the large number of timepieces that are available, not only from the new collections each year, but also the ones that are still in production or remaining stock from previous years, has only served to dilute the residual value of new timepieces. You only need to look at the auction estimates of recent watches, and the sheer numbers that are presented in Hong Kong, New York and Geneva, to see just how this has affected the near future value of a watch. The good news is that the current market conditions, which are challenging at best, have become a buyer’s market. Without the investment aspect in the equation, the selection is vast, and your boutique will undoubtedly greet you with open arms. You can look through recent auction results to see which brands have achieved good results on modern watches and may have a good chance of retaining value in future. A watch’s rarity is also a significant factor, but beware of being lured by the words “limited edition”; which has been used loosely all too frequently. If the availability goes well into the four digits, it starts to stretch the definition of “limited”. A low three-digit production, or even double digits is preferable, but will likely be priced accordingly. Don’t shun the pieces that don’t seem popular; some of the most successful watches at auction today were the ugly ducklings of yesteryear which by virtue of the lack of commercial enthusiasm at the time, led to them being very limited in production as the brands reduced and ultimately stopped making that particular collection. If you’re more interested in vintage watches, there are some additional provisos, which are very similar to the art world. Similar to new watches, you need to consider the rarity of the piece, as well as condition and provenance. Condition is about the state the watch is in, whether it has led a very active life, and might be the worse for wear as a result. However, condition also refers to whether the watch is original, that is, if it has been restored or refurbished at any point in its life. This is truly a minefield, for the older the watch is, the more difficult it is to determine what restoration or servicing may have been done, if any. There are also fakes to watch out for, and what we call Frankenwatches, pieces that seem unique but are actually a combination of various parts from different watches. Lastly, provenance refers to the watch’s origin, where it was purchased from, and who the previous owners might have been. We are seeing a number of truly investment-grade watches coming to auction in recent months, but they are also setting some eye-watering records, putting them out of reach of the casual watch buyer. In short, the old adage still remains: buy what you like, and enjoy it. Whether it gains in value in future should be considered a bonus. With some careful selection, you may be able to swing the odds in its favour. No matter what you do though, wear them! There is nothing worse than keeping a mechanical watch locked away in a safe for years, waiting for it to appreciate in value.