Insights: 5 Crucial Factors When Investing in Vintage Watches

TIMELY INVESTMENT. Watch expert Alexandre Bigler guides you on five crucial factors that will help you pick vintage watches as great assets

Daytona-Sale DA MAN Timely Investment Insights Watch

The auction of Rolex Cosmograph Daytona at Christie’s auction

A common trend these days is that wealthy individuals who want to diversify their investment portfolios are frequently looking into alternative investments where passion speaks more than pure pursuit of profit. The emotional connection to precious and rare objects such as precious timekeepers—manufactured at the highest level of craftsmanship, having survived centuries, and offering true exclusivity to their owners—is a pleasure that stock-market shares or bonds can’t compete against.

The financial values of these rare objects are generally defined by the market, based on the scale of offer versus demand. The temperature of the market can be analyzed through auction results. Prices at auction for rare watches have been on a constant rise over the last decade and will continue to do so as vintage watches are fantastic assets.

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Jaeger-LeCoultre’s pocket watch (1892)

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A watch certification paper

HOW TO START

Vintage watches from the golden era dating from approximately 1920s up to early 1980s are a new class of assets that have various advantages compared to other commodities—they are wearable, exclusive, irreplaceable and highly liquid. They also carry prestige, given the history and provenance, and offer functionality and craftsmanship. On top of this list, watches have no cultural limitations and, therefore, can be appreciated and worn by virtually any human kind. In other words, vintage watches have a potential to grow in value over the next decade as it’s an asset class that is easily understandable and can be appreciated by all generations, both men and women.

A key factor to keep in mind when contemplating the next purchase of a vintage watch is quality. It will define your investment and the potential returns in the years to come. Too often, new vintage collectors have a tendency to buy “the best price” rather than buying “the best watch.” This is a common pitfall when joining the vintage collecting field.

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Jaeger-LeCoultre Historic Reverso Heritage

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Rolex Cosmograph Daytona (1963)

Here below are five core factors that will help you define your future vintage collection:

1. QUALITY OF THE BRAND

When was the brand founded? Who owns it today? What are their current strategies? What type of watches do they produce? What level of quality do they offer?

These are some questions one should think of before “investing” in one of watch brands—similar to background checks you would do before buying shares from a particular company.

2. QUALITY OF THE MODEL

We all want to buy what we like and what is aesthetically beautiful. But beyond those factors and fashion, what is the true quality of a model?

I believe that quality models are the ones that are internationally recognized as icons, such as a Rolex Daytona or a world time by Patek Philippe or a tourbillon by Breguet. Iconic pieces have a proven record of popularity among collectors that transcend all generations. Therefore, these flagship models are safer to invest in, as they are already well recognized by the market.

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A rare piece of Breguet No. 4039

3. QUALITY OF THE MOVEMENT

The heart of a watch is the movement. A good movement is one that not only delights and surprises watch lovers with its aesthetics, but also inspires a degree of intellectual stimulation. Frankly speaking, quartz or battery-powered movements are rarely considered as investment. On the other hand, the craftsmanship appeal of mechanical movement is worth the investment and is one of the fundamental elements when investing in watches.

4. QUALITY OF THE RARITY

How rare is the watch you are about to purchase? How many pieces were truly manufactured?

Defining rarity is not always easy, as limited editions and limited productions are two different things. Mostly seen in contemporary pieces, limited editions are purposely created with the intention of being scarce. But too often, these limited edition pieces, once successfully marketed, are reissued in various different configurations. Richard Mille and Audemars Piguet are masters at producing limited edition pieces.

Models that were produced in limited numbers are, by definition, limited and rare. There was no initial intention to make watches in limited editions back in the golden era. Each model was manufactured in small quantities. Some were being discontinued later. Patek Philippe is probably the best example where production levels for each model are low, making each Patek Philippe watch rare by nature.

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Patek Philippe Ref. 1518

5. QUALITY OF THE CONDITION

This last criterion is probably the most important factor when making decision of purchasing a vintage timepiece. The logic behind the purchase of a mint vintage watch is that it has not undergone any cosmetic enhancements to the dial (cleaned or refinished dials are less desirable); that the case has not been polished (keeping its original case proportions and displaying its original shape); and that the watch still comes with its original certificate and box.

A true collector’s dream would be to be able to go “back in time” and purchase the desired watch in the same condition as if he or she were the original owner. On the contrary, If the dial has aged badly, the case been polished, and the watch left “naked” (with no box and certificate), the overall value of the watch will be drastically different than otherwise—i.e. the dial has attractively aged over the years (displaying a beautiful patina for example), and the
original shape of the case is still sharp without having undergone careless polishing, and the watch comes complete with the box and certificate.

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Longines’ Equestrian Lépine pocket watch

CASE STUDY

It is interesting to note that on the pictured graphic, the reference 1518 by Patek Philippe, the first perpetual calendar made in series by the brand, has achieved two different types of value at auction. These variations in price would not occur with a contemporary timepiece. There would be a difference of five to ten percent depending on the condition of the watch. In the case of vintage watches, should the condition be spectacular, such as displayed by the index in blue, then the value for this reference 1518 by Patek Philippe is as much as double in price compared to an average condition of a reference 1518 as displayed by the grey index. Such exciting results have convinced contemporary collectors to shift their collection to vintage timekeepers as the returns are much more interesting than the returns with modern pieces.

Alexandre Bigler is a watch specialist and associate vice president in the watch department of Christie’s Hong Kong. Before joining Christie’s in 2010, he worked in the international watch auction business for over five years. Born in Switzerland, Bigler speaks French, English and German.

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