You’ve probably heard that if you’ve invested in the stock market in 2017, you could have doubled your money in 2022. Doubling your investment in the stock market is great, but what if you knew that the S&P 500 Index, one of the best stock market indices, only ranks 16th when compared with other investment opportunities?
Luxe Watches gathered the data on the market performance of a range of asset classes including stocks, crypto, precious metals, art, and luxury items including watches to find out which got the best ROI over the last five years. Here are the findings.
Luxury Watches Yield Double The ROI Of The Stock Market
Comparing the performance of the secondary luxury watch market to stocks, we find that Patek Philippe watches outperformed two of the most popular stock market indices – the S&P 500 and the FTSE 100.
It is significant to note that this is not a brand-specific phenomenon, since the overall watch market follows a similar trend. However, this does not apply to all luxury watch brands. Rolex, arguably the most popular watch brand, performed roughly the same as the S&P 500, but it still outperformed the FTSE 100 Index.
It’s clear that in the last five years luxury watches were not just a fashionable choice – they were also a strong investment decision.
Real Estate: Great To Live In, But Not The Best Investment
When comparing the watch market with the UK house price index (which calculates the monthly average house price change) the contest is not even close.
Real estate is a great way to preserve your investment and hedge against inflation, but 30% ROI in 5 years is not much to write home about. Especially when you compare it to the 207% that you could have made investing in Patek Philippe.
Precious Metals Are A Great Investment…When They’re Used To Make Watches
Gold and silver are great examples of assets that people use to hedge against inflation, but they do not yield the best ROI. In the past five years, the overall luxury watch market yielded four times the ROI of gold and twelve times as much as silver.
The upward trajectory of luxury watches over time compared to the somewhat stagnant (or even negative) ROI that you see with silver and gold is another indicator that precious metals are worth more when used to create even more precious watches.
Crypto Is One Of The Few Assets With A Higher ROI Than Watches
If you invested £1,000 in Etherium in 2017, you could afford a high-end luxury yacht in 2022. Cryptocurrencies like Bitcoin and Etherium have yielded enormous ROIs of 3512% and 7366% respectively in the past five years. This trumps the 93% you could have made by investing in a Rolex.
As ever, this is not necessarily an indication of the future of these assets. Cryptocurrency blew up in 2017 and had a resurgence in 2020, but luxury watches have been around for much longer. It will be interesting to see what happens in the years to come to both of these asset classes.
Watches Are The Best Fashion Items To Invest In
In the past 5 years, you would have been better off investing in carefully selected designer bags or clothing collabs than in real estate or the stock market. We analysed the performance of the iconic Louis Vuitton speedy bag which yielded a surprising 58% over the last five years. There was a major dip in price in 2020, but apart from that, it’s been a steady tick upwards.
We also analysed the performance of the iconic collaborations between Louis Vuitton and Supreme to release the Monogram Red Belt, which yielded 61% over the last five years, and the limited edition Nike MAG Back to the Future (2016) Sneaker which has skyrocketed in value yielding 207% in the last five years.
Although these items performed well, the clothing industry is very hit and miss. Fashion investments are generally safer in the luxury watch market which is less volatile than other luxury fashion items.
Luxury Watches Speed Past Supercars With Ease
We analysed the performance of three of the most sought after supercars and they all have a similar performance. The Lamborghini Aventador and Bentley Flying Spur both had an ROI of 6% over the five year period, while the Ferrari 488 actually had a negative ROI of -7%.
Comparing this to the 200%+ of Patek Philipe, it’s easy to see which would be the smarter investment option. It is clear that supercars are a luxury item to be enjoyed, but not for generating wealth. If you want something that you can enjoy and will grow in value, luxury watches are the more sage investment.
Art Is The Best Investment, If You Time It Just Right
Unlike luxury watches, which can be bought and sold quite frequently, the art market is relatively static. Most art pieces are bought once and usually to be kept as a collectible. This was the case for both the Nu Couché and the world’s most expensive painting, the Salvator Mundi. Both were sold in 2018 yielding an ROI of 122% and 253% respectively.
Collectible cards make for an interesting comparison. Looking at one of the most sought after cards in the world, The PSA10 Charizard 1st Edition Holo, most of the ROI was made in 2020-2021 when it was sold for $400,000 and was originally bought for $36,000 yielding an ROI of 1000% for that year and an ROI of 1563% for the last 5 years.
The ultimate art piece in terms of ROI is not even a physical piece, but rather an NFT. NFT stands for Non-fungible Token which is a fancy way of saying digital art with a certificate of authenticity. This specific NFT is part of the CryptoPunks collection and it was sold for £23,700,000 in 2021, while the owner had originally bought it for under $2000. This is an ROI of 1,439,754%. Unlike CryptoPunks, most NFT projects significantly decline in value.
When we compare art to the best watch in terms of ROI, The Patek Philippe 57111A, we find that there is a steady increase which means that it’s a much safer investment option compared to the volatile nature of art investments. The Patek Philippe 57111A has yielded an ROI of 788% over the past five years which means it ranks 5th best on our overall list.
Is Rolex The Best Luxury Watch Investment?
Rolex might be the most famous luxury watch brand, but it is not the highest-yielding investment. The number one spot goes to Patek Philippe with an ROI of 207% over the past five years. Rolex, which yielded 93% over the past five years, does not even take second place. That honour goes to Audemars Piguet, which yielded 158% on average. Vacheron Constantin comes in at 4th place with an ROI of 55% and A.Lange & Söhne is 5th with an ROI of 18% over the past five years.
Expert Insight: Why is Rolex not the top performing watch brand?
“I believe the main reason is the limited production numbers. Rolex produces approximately 2 million watches per year, where Patek produces around 55,000 watches, so there are a lot fewer Patek Philippe watches on the market than Rolex watches.“
“Along with the fact that all Rolex models are in demand in comparison with Patek who really only have 2 desirable models, the Nautilus and the Aquanaut.”
– Nicholas Hickey, Managing Director, Luxe Watches
Timeless Timepieces: The Best-Performing Individual Watches
What happens if you compare the most popular individual watches for each brand in the second-hand luxury watch market?
It’s no surprise that Rolex, the most famous luxury watch brand, makes the list. The surprise is that the Rolex 116500 is only the 4th best yielding watch over the past 5 years.
The Patek Philippe 57111A yielded a whopping 788% over the past few years and is showing no signs of slowing down.
Our analysis showed that all of these watches had a positive ROI and it also showed that all the watches had an upward trajectory going into 2022. The A. Lange & Söhne 404.305 was the only watch on our list that had a negative ROI, but going into 2022 it sits at a positive 1.89% ROI.
Expert Insight: Why are these watch models performing so well in the second-hand market?
“The Rolex Daytona (Rolex 116500) is very often the first watch that comes to mind when people think of the brand Rolex. In the world of high end watches it’s actually not priced ridiculously compared to some other brands. The Daytona has always felt like the jewel of the Rolex Sports model range, for this reason, waitlists are extremely long. This difficulty to purchase creates a large demand from people who would prefer an instant purchase. “
“The Nautilus (Patek Philippe 5711) is a perfect example of the ultra premium sports watch market, again incredibly exclusive and near impossible to purchase at retail. This is definitely the first stop for anyone looking to make a statement!”
– Nicholas Hickey, Managing Director, Luxe Watches
Not All Luxury Watches Are Created Equal
Analysis shows that not every luxury watch brand is great for investing. Although all brands saw an uplift in 2021, some brands yielded a very modest return compared to their counterparts.
Hublot demonstrated an 8% ROI which is 12X less than Rolex and 26X less than Patek Philippe. We also see modest ROIs between 5% to 8% for Girard-Perregaux, BVLGARI, Piaget and H. Moser & Cie. This is higher than other asset classes, such as real estate, but still much lower than alternative watch brands in the market.
Expert Insight: Why are these watch brands not performing as well as other luxury watch brands?
“Quite simply mass production means Hublot does not perform so well. Hublot is owned by LVMH, so I believe they like volume over anything which can have a negative impact on the brand.“
“Girard-Perregaux on the other hand traditionally never had a desirable model, but that has now changed. The Laureato collection is causing a stir in the industry with a great design along with a fair retail/reseller price backed with a strong brand history.”
– Nicholas Hickey, Managing Director, Luxe Watches
What’s The Best Performing Asset Class In The Last 5 Years?
Disclaimer: This article is not financial advice. You should do your own thorough research before making any investment. If in doubt, consult a professional financial advisor.
We collected the ROI of each of these asset classes and calculated the year on year ROI from March 2017 to March 2022. Here is where we got the data:
We used WatchCharts for the individual watches and watch brand indices.
- The WatchCharts Market Index is an indicator of financial trends in the second hand watch market. It is comprised of 30 popular watch models with high trade activity. The index shows the average market price of these 30 watches over time.
- Each watch brand index is based on its performance in the secondhand market. For example, the Rolex brand index is an indicator of the Rolex’s financial performance in the second hand watch market. It is comprised of 30 popular Rolex models with high trade activity, listed below. The index shows the average market price of these 30 watches over time.
- Individual watch prices are also based on data from the second hand watch market. We chose the most popular watches for each brand based on the WatchCharts popularity index.
The S&P 500 Index and FTSE 100 data came from Market Watch.
The UK House Price Index came from the ONS 2022 report.
The Gold and Silver historical prices from Macrotrends.
Bitcoin and Ethereum historical prices from CoinDesk.
The luxury clothing data all came from historical sales on Stock X.
Supercar historical prices came from CarGurus.
The Salvator Mundi and Nu Couché price over time from several news articles confirming the sale prices.
The Charizard 1st Edition Holo data came from pokemonprice.com which tracks sales of the card on the secondhand market.
The CryptoPunk historical prices came from Larva Labs which had a log of the blockchain transaction history for the NFT.