The used luxury watch market has been declining since 2022. Still claims that luxury watches like Rolex have less volatility. The study found that high-end watches saw average annual returns over real estate.
At a time when tariff whiplash and geopolitical uncertainty pushed the S&P 500 to stock market corrections, luxury watches were able to stand the test of time.
A recent study by two Swiss Finance professors claims that when examining the various indices tracking the performance of these assets between January 2019 and September 2024, luxury watches have less market volatility than real estate, stocks, “bonds” or “bonds” or bonds.
The findings suggest that high-end watches can be a “attractive option” for investors looking to diversify their portfolio as they have a low correlation with the stock market and make low-risk investments.
“The volatility (3.90% volatility per year) and range of the watch market is the lowest among all asset classes,” said the study, published February 24th in the Social Science Research Network. “The closest asset class from a risk perspective is bonds, with volatility of 5-8%.”
Filippe Weisskopf, who co-authored a paper with a colleague at Philippe Masset, an EHL Hospitality Business School, told Business Insider in an interview.
“There aren’t that many transactions. This kind of type makes the risk a little less,” Weisskopf said, adding that he and his colleagues tried to explain the issue by excluding data that considers daily price movements.
The return from the luxury watch also tells mixed stories.
“Overall, the watch market (annual return of 5.68%) was poorly performed in stocks (12.85%) and gold (13.06%), but outperformed bonds (negative returns) and real estate (3.14%),” the survey said.
However, some brands have approached the average annual return seen in the MSCI World Index. In this study, this study was used as a measure of global stock market performance.
Audemars Piguet showed an average annual revenue of 11.68%, while stocks showed an annual revenue of 12.85%. According to the survey, Patek Philippe showed an average annual revenue of 10.92%.
Weisskopf notes that when considering investing in luxury watches, brand knowledge and knowledge about specific models within the brand is important.
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Rolex’s recession
The conclusion of this study is a factor in the decline of the second-hand watch market over the past three years.
According to WatchCharts, there was a huge boom in the resale market in 2022, with the used Rolex Daytona priced at $48,500 in March that year, earning nearly 228% markup from the $14,800 retail price in 2023.
Today, the estimated cost of a resale Daytona is shown by the $27,052 WatchCharts data. This still represents a price increase of around 83%.
A study by Weisskopf shows that brands like Rolex and Vacellon Constantine have returned more than 50% since 2022.
“On the other hand, Ardmer’s Piggett and Patek Philippe are the best performing brands, with prices tripling between 2019 and 2022,” the study states. “However, the two brands have roughly doubled over the combined period (i.e., from January 2019 to September 2024).”
In an interview, Weisskopf pointed out that the findings in the paper are better long-term investments, but the study should not be taken as investment advice.
“From a financial economist perspective, I don’t know how the watch market can turn around a lot of it, politically, geopolitical and economically, what’s going on around this world,” he said. “I think a lot of people are paying a little more attention to where they spend their money right now. So I don’t think it will go up. Is it going to stabilize?”
