Investing in time

SPONSORED CONTENT – Watch collecting can be addictive and expensive, but it can also be a very sound investment strategy

Take a look in the window of a luxury watch boutique and a couple of things become abundantly clear – the breadth of luxury watch brands is extensive, and the price of a luxury timepiece ranges from expensive to eye watering. Consequently, it’s safe to say that the luxury watch market is buoyant, which is impressive for an industry that was on the brink of collapse 50 years ago.

The so-called “quartz crisis” of the ‘70s hit traditional watch manufacturers hard, with a new, more accurate and modern solution for powering wristwatches rolling out of Japan and decimating the predominantly Swiss watchmaking artisans in the process. Gone was the wonder and beauty associated with ever-more intricate mechanical movements, replaced with a pulsating crystal and a battery.

Thankfully traditional watchmaking did survive, albeit with a distinct change in direction. While quartz provided the opportunity for cheap, mass-produced watches that the wearer didn’t have to worry too much about, traditional mechanical watches became more aspirational items, driving volume down and prices up.

Today a wristwatch can be a significant investment, but if you buy the right one it can also be a wise investment that will appreciate over time. Buy the right watches and you’ll have a collection that’s a joy to own and wear, with the added benefit of knowing that each of those timepieces is worth more than you initially paid for it. But as with any type of investment, you need to understand the market and separate the “expensive” from the “truly valuable”.

Worth its weight in gold?

For a long time the value associated with a watch could be linked to the materials used in its manufacture. Precious metals such as silver, gold or even platinum would demand a higher price based entirely on the rarity and value of the chosen material. Likewise, the use of precious jewels would also, understandably, result in a watch with a significantly higher price tag.

What’s important to remember is that price and value don’t necessarily correlate when it comes to watches, and while a bright yellow, solid gold watch used to represent the epitome of style and status, times and tastes have changed. Few watch buyers, and even fewer collectors, will seek out ostentatious models hewn from gold and encrusted with jewels, meaning that while such watches will command a high price when new, their long term value will likely diminish.

That’s not to say that watches manufactured from precious metals won’t become more valuable over time, rather that the initial cost will be higher and a better return on investment could be had elsewhere.

Making movements

The movement is the mechanical engine inside a watch, and the quality and provenance of a watch’s movement can have a significant impact on both initial purchase price and value over time. There are certain watchmakes that are world renowned for the quality of their movements, none more so than Jaeger-LeCoultre, which over its near 200-year history has manufactured movements for some of the most famous watch brands on the planet.

But in today’s market there’s a definite premium and value attached to an ‘in-house movement’ – meaning that the movement is manufactured by the watchmaker itself, rather than bought in from a third party. Bear in mind that many watchmakers will customise a third party movement, assigning its own name or ‘calibre’ to said movement, but this is still a less desirable solution than a fully in-house designed and manufactured movement. 

There are many aspects and key components to a movement, but in broad strokes mechanical movements fall into two categories – manual and automatic. As those names suggest, a manual movement requires hand winding to load the mainspring and keep the watch ticking, while an automatic movement is self-wound via the inclusion of oscillating weight that pivots as the wearer moves throughout the day. 

While logic would dictate that an automatic movement would be preferable and more valuable, that’s not necessarily the case. Watches are tactile things, and the ritual of regularly winding a beautiful timepiece is something that watch enthusiasts will never tire of. The lack of oscillating weight also results in a slimmer movement and consequently slimmer watch, which is why ultra-thin dress watches are often manually wound. 

It’s complicated

A watch’s complication refers to any functionality it provides over and above telling the time. This could be something as simple as a date display that automatically updates at midnight, or something far more, well, complex. 

A relatively common complication is the chronograph, which adds stopwatch functionality to a wristwatch, but while it’s quite common, it’s also very complex. Creating a movement with an integrated chronograph was such a huge challenge for watchmakers, that for a long time most chronograph watches actually had two distinct movements inside – one for telling the time and another for the chrono. As such, an integrated chronograph movement is considered more desirable and more valuable than a modular movement. 

There are myriad complication variations to be had, from a depiction of the moon phases, to multiple time zone support, but the holy grail of complications is the perpetual calendar. If you have a watch with a date window, you’ll need to manually adjust it at the end of each month that doesn’t have 31 days. An annual calendar watch will automatically account for 31 and 30 day months, only requiring manual adjustment once a year, on 1 March. A perpetual calendar watch is far more clever, and if you bought one today, you wouldn’t need to manually adjust it until the year 2100!

The watches to wish for

There’s no shortage of fabulous watches to spend your money on, but there are certain brands and models that models that are likely to deliver a return on your investment, should you ever be able to bring yourself to sell:

Rolex Submariner

The Rolex Submariner is the quintessential dive watch, not because it was the first of its kind – that accolade goes to the Blancpain Fifty Fathoms – but because if you ask almost anyone to describe what a dive watch looks like, they’ll almost certainly describe a Rolex Submariner. Maybe that’s because it was the watch of choice for a certain British secret agent – before paid product placement became prevalent – or perhaps it’s just because the Submariner exhibits such a functional yet stylishly timeless design. The Submariner you buy today really doesn’t look that much different to the original 1953 model. Iconic Rolex watches like the Submariner are so sought after that it’s hard to find one available at the £7,300 list price, but if you are lucky enough, it’ll likely be worth nearly double that as soon as you walk out of the store.

Audemars Piguet Royal Oak

The Audemars Piguet Royal Oak is widely regarded as the watch that saved watchmaking. As the quartz crisis swept through the industry, Audemars Piguet commissioned Gérald Genta to design a luxury sports watch in steel. Legend has it that Genta designed the Royal Oak in one evening, with its octagonal bezel secured by visible screws reflecting a deep sea diving helmet. The Royal Oak was launched in 1972 with a price tag higher than many precious metal watches at the time. This was a huge risk, but one that paid off, with the Royal Oak becoming the most desirable watch of its time. Even today it’s one of the most distinctive and wanted watches, and while the list price of £21,400 is nothing to be sneezed at, it will almost certainly never be worth less than that.

Patek Philippe Nautilus

Gérald Genta sent shockwaves through the watch industry with the Royal Oak, redefining what a luxury watch could be. So in 1976 Patek Philippe commissioned Genta to create another new luxury sports watch. Again, if legend is to be believed, Genta sketched the original design for the Nautilus in five minutes on the back of a napkin while he was having lunch. Once more he looked to the sea for inspiration, this time basing his design on a porthole in a luxury liner, and also giving the watch a suitably nautical name. Like the Royal Oak before it, the Nautilus was hugely popular and watch enthusiasts would lust after it for decades. Patek Philippe recently retired the iconic Nautilus Ref. 5711/1A-010 which carried a list price of around £28,000 at the time – these are now changing hands for close to £100,000

Rolex Daytona

It’s hard to imagine a time when the Rolex Daytona wasn’t sitting atop endless ‘most wanted’ lists among watch enthusiasts, but in reality the most sought after Rolex model was something of a flop in its early years. In 1957 Omega launched its Speedmaster Chronograph, complete with a brand new, in-house movement. At the time Rolex didn’t even manufacture its own movements. And just over a decade later Neil Armstrong wore a Speedmaster when he stepped onto the surface of the moon, a fact that Omega has successfully dined out on ever since. It was Omega’s trip to space that undoubtedly resulted in Rolex’s original Cosmograph branding, which eventually evolved into Cosmograph Daytona. It’s hard to pin down exactly when the Daytona flipped from being unwanted to unobtainable, but in the world of sports chronographs, it’s the daddy. There’s almost no chance you’ll find a Daytona at list price unless you’ve been on the waiting list for years, and have probably bought multiple other watches from your dealer. But rest assured if you do find one available for the £10,500 RRP, it’ll almost certainly be instantly worth three times as much.

American Express and Platinum Card branding with 'Don't live life without it' strapline

Spend for the future

The Platinum Card from American Express allows you to save as you spend, earning you a Membership Rewards® point for every £1 you spend on your Card. Your points can be used to pay for almost any item on your Card Statement – such as a top-end timepiece – and they never expire, so you can save them up and spend them when the time is right.

What's more, The Platinum Card also offers over 30 travel and lifestyle benefits, including airport lounge access, worldwide travel insurance, as well as a 24/7 Concierge service that can book you dinner after a day of watch shopping, or an action-packed holiday away.

For more information and to apply for The Platinum Card, click here.

Annual fee: £575. Terms and conditions apply.

Important information 

If you’d prefer a Card without any rewards, other features or a Cardmembership fee, an alternative is available – the Basic Card. Go to americanexpress.com/uk/basic-card for more information. Applicants must be 18 or over. Approval is subject to status, and Terms and Conditions apply.

Membership Rewards points are not earned on balance transfers, cash advances, American Express travellers cheque purchases, foreign exchange, fees and interest charges for returned payments, finance charges, late payment and referral charges, fees/charges including joining, annual and Membership Rewards fees. Membership Rewards Terms and Conditions apply to all Membership Rewards points redemptions. Visit americanexpress.com/uk/mr-terms.

For full Terms and Conditions of The Platinum Card, please visit americanexpress.co.uk/platinum

American Express Services Europe Limited is authorised and regulated by the Financial Conduct Authority.

This article does not constitute personal advice and is not a personal recommendation on the specific products mentioned. If you’re not sure whether an investment of this type is right for you, please seek advice from suitable financial advisers who will be able to advise based on your personal circumstances. If you choose to invest, the value of your investment could be at risk and fall, so you could get back less than the amount you put in originally.

Investing in watches is not regulated by the Financial Conduct Authority.

Recommended

The simple way to invest in iconic classic cars
Advertisement Feature

The simple way to invest in iconic classic cars

Alternative and passion investing are areas that have seen considerable growth in recent years, but some asset classes have priced investors out. Now,…
25 Nov 2022
Are we heading for a commercial property crash?
Alternative investments

Are we heading for a commercial property crash?

The pandemic has reduced the demand for office spaces and permanently changed the office environment. But John Stepek says rising interest rates are a…
1 Aug 2022
Collecting rare whisky: a £16m tipple served with froth
Alternative investments

Collecting rare whisky: a £16m tipple served with froth

The market in rare whisky is looking very bubbly, says Chris Carter, with a 1975 cask of recently selling for £16m.
26 Jul 2022
Classic car collectors step on the gas as prices rise
Alternative investments

Classic car collectors step on the gas as prices rise

Prices in classic-car markets are starting to look frothy
14 Jul 2022

Most Popular

Is it cheaper to leave the heating on low all day?
Personal finance

Is it cheaper to leave the heating on low all day?

The weather is getting colder and energy bills are rising, but is it really cheaper to leave the heating on low all day or should you only turn it on …
1 Dec 2022
Radiator vs electric heater – which is cheaper?
Personal finance

Radiator vs electric heater – which is cheaper?

We compare the costs, pros and cons of radiators and electric heaters and see which one will help keep your energy bill as low as possible.
28 Nov 2022
The pros and cons of smart meters – should you switch?
Personal finance

The pros and cons of smart meters – should you switch?

A smart meter can help you keep tabs on your energy usage, but is it better than a regular meter? We take a look at smart meters vs regular meters.
2 Dec 2022