Every time one of my articles is published and shared online by our editorial staff, I eagerly await reader comments and reactions. Just recently, I came across a comment that I haven’t been able to get out of my head. It criticized the constant mention of value retention and appreciation of watches. To be fair, I have often stated that I think value stability has very little to do with a passion for watches, but the comment got me thinking. I must admit, value retention is important to me when choosing a watch. But is that necessarily a bad thing for the watch community? Are there some positive aspects of value retention? Does a watch have to hold its value to be a good purchase or does it not matter at all?
Watches With Good Value Retention: Greedy for profit or a sense of security?
If interest in watches was solely centered around value and profit, the selection of luxury watches would be pretty small. Performance “monsters” like the Audemars Piguet Royal Oak aren’t quite as common in the world of watches as it may seem sometimes. Generally speaking, only a select few of us get to purchase popular timepieces like the Rolex Daytona or Patek Philippe Nautilus for their actual list prices. If you are one of the lucky ones, a quick sale to turn a profit would quickly earn you a place in the authorized dealer’s bad books. While there may be a few flippers out there who buy watches at their list prices and immediately sell them again for a high return, I am convinced that the issue of value retention is about something else entirely for the vast majority of us; namely, not throwing our hard-earned cash out the window. This is where luxury watches are truly unique. While other material hobbies, such as cars, fashion, and jewelry, often experience a lot of depreciation, luxury watches tend to hold their value relatively well (some more than others, of course). At the end of the day, all watch collectors have to decide for themselves how much depreciation is acceptable for a timepiece. How much are you willing to lose on a watch you no longer like and want to sell? And if you’re trying to sell a less popular watch, how long are you willing to wait to find a buyer? Or are these considerations completely irrelevant to you because you’d never sell a watch from your collection anyway?
What makes a watch enthusiast?
So, are watch enthusiasts who pay close attention to things like value retention when choosing their timepieces bonafide watch lovers? Well, I know a lot of like-minded people, and a certain cohort isn’t willing to lose a single penny in the value of their luxury watches. I personally think that is an unrealistic expectation and one that really limits their selection of timepieces. But can I say that they aren’t true or worthy watch lovers? Of course not! I don’t think there is any right or wrong here. I consider myself a true watch enthusiast. I am passionate about timepieces with great histories and iconic, timeless designs. I read and watch anything and everything I can about luxury watches and can even come up with good things to say about models I don’t even personally like! But I have to be honest, if luxury watches didn’t hold their value to some degree, I probably wouldn’t have started collecting them in the first place. I simply couldn’t afford to. The stability of luxury watch prices is part of what encouraged me to get involved with the watch world. Paradoxically, the watches in my collection that have either retained their value well or appreciated the most are the same ones that I would never dream of selling. When I bought each of them, I knew they would likely fetch high market prices down the line, but that wasn’t why I bought them – I just really liked them. However, knowing that their value would likely increase in future was the final push I needed to go ahead and click “buy.”
While I wouldn’t describe myself as a flipper, I have sold a watch from my collection on occasion. That’s what happens when I don’t like a watch anymore or I suddenly stop wearing one as often and have another potential purchase in mind. I’m perfectly fine with losing 20-30% of the original purchase price; watches are a hobby, and hobbies cost money. That is simply the price I have to pay to wear a nice watch for a little while and have some fun with it. I think it’s only fair to lose a little money on a sale. After all, I have added wear and tear to the timepiece by using it. As a general rule, however, I don’t gamble with my money and know my watches will still have some residual value. Again, this is one aspect of watch collecting that is extremely attractive to me. So, it doesn’t really matter whether value retention is important to you or not, we are all passionate about watches, and each have our own views and room for financial speculation.
So, do watches have to retain their value?
While leaving the stickers on a new Rolex and stowing it away in a safe for years certainly has very little to do with a love of watches, there are very few of us who actually do that. Most of us want to wear and enjoy our timepieces. Thus, when it comes to value retention, I think it’s safe to say that most watch lovers aren’t looking to earn high returns or turn a quick profit, but rather purchase a watch that loses as little value as possible. At the end of the day, we all want a great, high-quality watch that we can have fun with, wear, and – in the event of selling – doesn’t lose its entire value. This is particularly the case if you no longer like the watch or have something new in mind. If the watch you’re looking to sell has appreciated in value, great! But to answer the question above:
No, a watch doesn’t need to retain its value. Good value retention doesn’t make a watch more beautiful to behold, nor does it make a watch run any better, but it does make luxury watches more accessible and desirable to a wider audience. As a result, the industry is gaining traction and relevance in the world. For this reason alone, value retention is – despite all the controversy – something that benefits the entire watch industry.