Back in my days as a watch retailer, as the client proffered their credit card, they would often ask, “Is this watch a good investment?” Maybe I was too honest, but despite the pressure to sell I would try to explain the complex answer to this question.

Contemporary watches bought retail – with some notable exceptions – do not make good short- or medium-term investments. The VAT and initial hit of depreciation in going from the new to the pre-owned market, can make for an eye-watering loss.

For serious watch investment you have to go vintage. By definition, such watches are no longer produced and therefore limited in availability, and finding an early example in its original state will be particularly rare. Not everything rare is valuable, though, and selecting investment pieces requires a profound level of knowledge – and luck.

The twin titans of the auction world are Patek Philippe and Rolex. The level of recognition that these brands command, the longevity of their styling, and the landmark status of many of their watches, drive prices upwards. Rarity is key, and the early decades of wristwatch production by both brands saw short production runs and unique pieces, often specially ordered by important clients.

Typically, prices will climb year on year, though it’s not always the case. A Patek Philippe Ref. 2499 in platinum, one of only two ever made, sold at auction in 1989 for $253,000. Twenty three years later, having passed through the hands of Eric Clapton, it sold for $3.6m. By contrast, the most expensive Rolex sold at auction – a 1942 stainless-steel split chronograph Ref 4113 – reached $1.16m in 2011, and two years later sold for an identical price. Perhaps it was offered too soon, but the auction market can be an unpredictable place based on emotion as much as merit.

Vintage watches are prone to being faked, built from incorrect parts or badly restored. This is harder to identify as you go back in time and see company records become sketchier

Paying for a stellar watch with a proven auction history may show a good return over time, but it demands a huge amount of money upfront. There is always the remote possibility of stumbling across an important piece in a junk shop – this year a modified Breitling Top Time – worn by James Bond in Thunderball – sold for $160,000 after allegedly resurfacing at a car boot sale. Unfortunately, the ease of internet research means the chances of finding someone who doesn’t know the value of what they have is becoming increasingly remote.

If picking up a rare vintage gem for peanuts is as likely as winning the lottery, maybe you can get ahead of the curve and spot the next big trend. Vintage Heuers, especially the first examples of the renowned Autavia, Carrera and Monaco models, are tipped to rise. This is largely on the back of a result achieved in September this year when a first-execution Autavia achieved $25,000 – up from a mere $3,500 when it sold two years previously. This result shocked many commentators, and it may yet turn out to be an aberration, but the headlines won’t hurt future prices.

Plenty of potential for growth exists in the back catalogues of other big-name brands. Omega’s marketing efforts and themed auctions have attracted the attention of collectors, but they are nowhere near Rolex values yet. Early Longines watches are collectable but don’t make prices that reflect their quality, likewise some early Breitlings.

If you plan to invest in vintage watches but are not an expert, the first step is to seek advice. Internet forums are a good source of knowledge and guidance – and you will need it.

Vintage watches are prone to being faked, built from incorrect parts or badly restored. This is harder to identify as you go back in time and see company records become decidedly sketchier.

True watch experts have the experience and contacts to ensure what you have is genuine and the best example possible. After that it’s a question of patience and luck that the market agrees with your choice.

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