Our Research

Are Watches a Good Investment? The five myths that cost buyers the most.

The luxury watch industry, like any market with a sophisticated product and a less sophisticated buyer, runs on myths. Some are harmless. Some are convenient — for someone other than the buyer. A few are expensive.

What follows are the five myths we hear most often from clients who are unwinding a regret. We've stated each plainly, explained why people believe it, and replaced it with the mental model we'd want a buyer to walk in with.

Whether a watch is a good investment is rarely a question about the category. It is a question about one reference, in one configuration, bought at one price, by one buyer with one motivation. The myths all fail in the same way: they answer the broad question so you never have to ask the specific one.

Myth 01

“Luxury watches always hold their value.”

This is the foundational myth and the most expensive one. It is reinforced by every piece of marketing the industry produces and every story that gets told at a dinner party about a watch that doubled. It is, for the great majority of luxury watches, false.

The reality

A new luxury watch bought at AD retail loses roughly 30–40% in its first year or two — the steepest part of the depreciation curve. After that, the average annual decline drops to approximately 2% per year. Some specific references actually appreciate. A pre-owned buyer acquiring that same watch after the initial drop has already bypassed the most expensive part of the ownership cycle. They're buying on the flat part of the curve, not the cliff.

The new car analogy holds true here — drive it off the lot and it's worth materially less. The second owner gets the asset, not the depreciation.

This is aggregate data across the full luxury watch market. Among the brands investigated in a study of more than 90 watches across 25 brands, only specific watches from several watch brands appreciate on average. So the pre-owned advantage is real and broad — but specific reference selection still determines whether the flatter part of that curve holds, softens further, or reverses into appreciation.

Myth 02

“The brand is the asset.”

Buyers think in brands because brands spend hundreds of millions of dollars to make them think in brands. What a brand means exists only in our heads. While this is rational behavior for the brands, it is incomplete information for the buyer.

The reality

Within any luxury brand, references behave radically differently. Two watches from the same maison, sold at the same retail price in the same year, can have wildly different secondary market trajectories — driven by configuration, production volume, market sentiment, and a dozen other factors invisible at the point of sale.

The reference, not the brand, is the unit of analysis. A buyer who learns to think in references rather than brands has crossed the most important conceptual threshold in this category.

Myth 03

“Diamonds add value.”

This myth is so widespread among buyers — and so often gently encouraged at the point of sale — that we hear it in every category of consultation. It feels intuitive. Diamonds are valuable. Adding them should add value. Why wouldn't it?

The reality

In the luxury watch market, the reference architecture and the originality of the configuration drive the resale outcome. Aftermarket modifications — diamonds added, dials customized, that were not the brand's reference standard for that watch — almost universally narrow the buyer pool, complicate authentication, and depress secondary market values.

Even brand-original diamond configurations, in many cases, behave less well at resale than their standard counterparts. Our research found this pattern unmistakably. The exceptions are exceptions, and a competent advisor will know which is which.

Myth 04

“The authorized dealer will treat me right.”

Not because they won't try to. Most ADs are staffed by professionals who care about the relationship. The myth is more subtle than that — it is the assumption that the AD's interests are the buyer's interests, simply because the relationship is friendly. They are not. They cannot be. The AD's compensation, employer, and inventory all align them with the brand and the sale, not with the buyer's downside protection.

The reality

An authorized dealer is the right place to acquire certain watches under certain conditions. They are not the right place to evaluate whether a watch should be acquired. Those are different functions, and the industry has historically blurred them.

A buyer who walks into an AD with their evaluation already done — by an advisor whose only job is the buyer's interest — is the buyer who will likely come out ahead.

Myth 05

“Luxury watches are liquid.”

There is a secondary market for luxury watches. It is large, it is active, and it is global. A buyer who knows this reasonably concludes that when the time comes to sell, the market will be there. For certain references, under certain conditions, at certain prices, that conclusion is correct. For most watches, in most situations, it is a more complicated story than the buyer has been told.

The reality

Liquidity in the watch market is not a property of the category. It is a property of the reference. A steel sport Rolex with complete documentation, in unworn condition, at the right ask, moves in days. The same seller's dress watch from the same maison, purchased at the same boutique in the same year, may sit for months — and may ultimately clear only at a price the seller would not have accepted if they had known it going in.

The market exists. The exit, for most references, is neither fast nor guaranteed at anything close to the number the seller has in mind.

There are other myths

These are the five we encounter most.

Each of them costs buyers money — sometimes thousands, sometimes more. Each of them is the kind of thing an advisor on the buyer's side would have flagged before the conversation got to a sale.

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