When it comes to money and finance, many people make the mistake of assuming that every large purchase is an investment. But many consumer goods, such as electronics, cars, and clothes, depreciate in value, unless they become rare vintage items that are never touched and are preserved in mint condition. Watches are a more complicated matter. While most carry very little long term investment value, there are a few brands that do. Below are some things to keep in mind when shopping for them.

Mechanical Watches

A mechanical watch is a type of timepiece that does not need electricity and is thus technologically neutral. Those that buy them do so for aesthetic reasons, the same reasons that would prompt them to purchase artwork or antique furniture. Because mechanical watches do not have hi tech features then they are immune to becoming obsolete, and this is where they can provide investment value, or at the very least, be used as a wealth preservation tool (similar to silver and gold coins).

A mechanical watch has a lot in common with wine; it is produced in limited quantities, often by hand for the most exclusive brands, and over time as it becomes rarer its value will increase correspondingly. This has led some to refer to mechanical watches as being an investment, but things aren’t quite this simple. A mechanical watch will never be a true alternative to gold or silver coins, or even stocks or real estate.

The Luxury Watch Market Is Notoriously Fickle

While buying a luxury watch for a specific amount today and selling it in the future for more is not impossible, it is not as easy as stocks, bonds or coins due to the fickle nature of the watch industry. For instance, a few prominent collectors have the ability to influence the trends and tastes of the market. Therefore it is very difficult to predict which watches will be hot and appreciate in value at any given time.

Luxury Watches Can Be Excellent For Wealth Preservation

However, while luxury watches are difficult to invest in, they are excellent for wealth preservation. They are similar to gold and silver coins in that they cannot be printed out of thin air (like paper money) and are produced in limited quantities, which mean that those who buy them will be protected against inflation. The right brands tend to hold their value over time, and if they become rare can become extremely valuable.

The best brand which holds its value the most and may even appreciate is Rolex, specifically those watches that sell for between $4000 and $9000. Watches within this price range will have a sufficient number of buyers but will be outside the reach of most, but are not so expensive that finding a buyer for them is difficult. In other words, a $5,000 Rolex is better than some $80,000 Swiss brand that few but the richest in the world have ever heard of. Rolex is a name recognizable even to those that know little about luxury watches.