Weekend: 3 Watches That Have Been Better Investments Than Stocks
Over the past three years, we review some of the price performances from popular watches against a benchmark of the S&P 500.
The Watch Market Index has outperformed the S&P 500 over the past three years.
Watches from Patek Philippe and Audemars Piguet have delivered 100%+ returns.
Classic designs and brand reputation help to keep prices elevated.
For some, talking about fine timepieces as investments makes them roll their eyes. Granted, it sits in the alternative investment category. Yet alongside wine and art, watches have proven to deliver investors returns as well as giving pleasure to the owner at the same time.
To get started, consider the return of the Watch Market Index, which tracks the average prices of 60 watches. Over the past three years, it’s up 47.5%. Over the same time period, the S&P 500 is up 34%.
Even as a simple example, it shows that watches can not only keep pace with the stock market, but can indeed outperform it.
The index is made up of 60 watches as a basket. We dived in to take a closer look at some of the best performers.
Patek Philippe Nautilus
With a retail price of just under £41k, this Patek is selling in the grey market for £96.3k on average. Assuming you picked this up at face value three years ago, this amounts to a return of 135% over the period.
Patek Philippe has a number of reasons why it has increased in value. The name for a start is a hallmark of quality. It’s the oldest and one of the last remaining independent, family-owned manufacturers.
Further, it’s estimated that annual production is under 70,000 total watches, although this has never been confirmed by the brand. Back in 2019 it was estimated that they were making around 10% of the demand for the Nautilus alone.
Rolex Daytona
Arguably one of the most classic and timeless watches money can buy, the Rolex Daytona is a watch you’ll almost never lose money on if bought at face value.
It currently lists at £14,500, with the average selling price currently around £22,000. This 52% return might not feel huge, but it’s at a much more attractive price point that the Patek, meaning this is a more obtainable return for investors.
What has helped provide such a return? Firstly, little has changed with the Daytona in the 58 years since it was first made. This timeless look and feel makes it very desirable for investors as it has a long track record.
According to reports: “the exclusive movement is more complex to create meaning that even if Rolex increases production, they can only increase it so much, due to the added time required to build such a model.”
Audemars Piguet Royal Oak
Finally, we turn to the AP Royal Oak. Another classic timepiece that hasn’t changed much over the decades since it was introduced, the price has been consistently high versus retail.
If you could have bought one at face value three years ago, it would have cost you £18k. Currently, they are going for £36k on average in the second hand market.
This represents a 100% return in this period. Granted, the difficulty in making this return stems from the fact that buying one through a dealer would have been incredibly hard. The scarcity and exclusivity of the brand means that the price will always be elevated due to supply being restricted.
Beside this, the main factor why this is so special is the bold design. The casing, bracelet and mix of brush and tapered angles all creates a very unique watch on the wrist.
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Timely piece :-)
great take, thank you!