Luxury watches, especially brands like Rolex, Patek Philippe, and Audemars Piguet, have emerged as popular alternative investment assets in recent years. Driven by rising global wealth, watch collecting has become a status symbol. At the same time, with low correlation to stock markets, luxury watches can also preserve and increase wealth. This article analyzes the investment value, market performance, and future trends of luxury watches.
Luxury watches as stores of value with portfolio diversification benefits
The unique value proposition of luxury watches is that they tangibly retain, and often increase in value over time, while also having low or negative correlation with volatile stock markets. This makes them excellent portfolio diversifiers. For example, from 2018-2022, prices of top Rolex, Patek and AP watches rose 20% annually, despite stock market declines in 2022.
Robust growth in secondary trading driving watch investment appeal
The secondary pre-owned luxury watch market has boomed, growing to $20B in 2021 sales. Strong demand from millennial collectors and convenient online resale platforms like WatchBox are driving rapid growth. Banks like Morgan Stanley now offer watch investment funds for clients.
Rolex leads the pack with iconic brand status
With unparalleled brand recognition and prestige, leading Swiss manufactures like Rolex account for over 90% of investment-grade watch sales. Discontinued sport models like Daytonas and GMTs are most coveted. Rolex’s scale and vertical integration delivers both scarcity and quality.
Outlook remains bullish amid luxury boom
Despite economic uncertainty, the luxury market is booming, especially in China. And watches remain top-of-mind status symbols that are passed between generations. Major industry deals like Rolex’s 2022 $1B purchase of top retailer Bucherer signal continued strength.
In conclusion, top Swiss watch brands like Rolex present a unique combination of property value preservation, emotional fulfillment, and portfolio diversification that will continue to drive demand from collectors and investors alike.