At What Price Do Watches Stop Being Investments?

A Rolex Submariner Date 126610LN bought at its September 2020 retail price of $9,150 traded around $14,000 on the secondary market five years later — a Finluxy Watch Value Retention Score of roughly 153. The same five years produced almost nothing resembling that outcome at the top of the price ladder. The watches marketed most aggressively as “investments” — six-figure pieces from the haute horlogerie houses — are precisely the ones where the investment thesis collapses under transaction costs, illiquidity, and a secondary market that punishes scale.

The question in the title is not rhetorical. There is a price band where a luxury watch behaves like an appreciating asset, and a price band where it behaves like a depreciating consumer durable wearing an asset costume. The boundary is measurable.

The numbers that frame the question

Sources: Rolex retail (aBlogtoWatch, StockX, Sept 2020); secondary value (Chrono24, WatchCharts, 2025); WatchCharts Overall Market Index (2025–2026); S&P 500 (SoFi/Standard & Poor’s, trailing 5-year to Dec 2024).

Three of these five figures matter most. The Submariner appreciated. The broad market, measured by the watch secondary market index, fell more than a third from its 2022 peak. And the S&P 500 — the opportunity cost benchmark — compounded at 13.6% annually over the comparable window, per SoFi’s reading of Standard & Poor’s data through December 2024. The watch that “won” did so against a backdrop where most watches lost, and where simply holding an index fund would have outperformed the median timepiece handily.

Where the retention curve actually bends

Run the Finluxy Watch Value Retention Score across price bands and a pattern emerges that brand marketing actively obscures. The score — secondary market value after five years divided by original retail price, times 100 — isolates the one thing buyers claim to care about: did the money survive.

Sources: Rolex and Patek figures from Chrono24 and WatchCharts model overviews (2025–2026); mid-tier and ultra-high-end ranges synthesized from WatchCharts brand indices (2025) and segment averages. Model-specific Richard Mille five-year retention data was unavailable from primary index sources.

Notice what the score does to the marketing hierarchy. The cheapest watch in the table posts the highest retention. Patek Philippe’s Nautilus price versus resale reality still clears 100 on the most desirable references, but WatchCharts noted through 2025 that Patek’s premium over retail had compressed to single digits before the late-2025 recovery — meaning a buyer paying grey-market markup at the peak could easily sit underwater. By the most recent reading, Patek Philippe was up 14.4% over the trailing year through January 2026, the best major-brand performer, which only underscores how reference-specific and timing-specific these outcomes are.

The transaction-cost wall at the top

Consider a buyer evaluating a Richard Mille at $200,000 retail against the same buyer’s Royal Oak investment analysis at one-tenth the price. The Audemars Piguet Royal Oak trades in a deep, liquid market with hundreds of comparable sold listings on any given week. The Richard Mille does not. Thin markets mean wide bid-ask spreads, and wide spreads mean the buyer eats a haircut the moment the watch leaves the boutique.

This is the structural reason watches stop being investments above a certain price. The mechanism is not depreciation in the accounting sense — it is friction. Auction houses charge buyer’s premiums that have climbed toward and past 25% at the major houses, and a seller consigning a piece faces a seller’s commission on top. A watch must appreciate enough to clear both sides of that spread before the owner sees a dollar of real gain. On a $10,000 Submariner trading 40% above retail, the math works. On a $200,000 piece that needs to clear $50,000 of combined transaction cost just to break even at auction, the appreciation hurdle becomes punishing. The full watch auction fees and true cost structure is where most “investment” theses quietly die.

Liquidity compounds the problem. A steel sports Rolex can be sold in days. A six-figure independent piece can take months to find its one qualified buyer, and during those months the seller absorbs insurance and storage cost while the market moves underneath them.

Cost of ownership is the figure nobody quotes

Retention score measures only the asset side. The carrying cost side is where the watch-as-investment narrative omits the most. Net cost of ownership, in the Finluxy framework, is purchase price minus residual value, plus cumulative insurance, plus servicing, plus secure storage — and every one of those line items scales with the watch’s value.

Sources: Insurance ranges from fine jewelry and watch insurance industry pricing (1–2% of insured value annually); servicing intervals per manufacturer recommendations; storage cost estimates synthesized from collector safe and vault pricing. Figures illustrative, not model-specific quotes.

The insurance line alone reframes the comparison. Fine watch coverage typically runs 1% to 2% of insured value per year, which you can confirm against current fine jewelry insurance cost benchmarks. On a $200,000 watch that is $2,000 to $4,000 annually — every year — bleeding against any appreciation. Over a ten-year hold, carrying cost on the high-end piece can exceed the entire purchase price of the Submariner. Servicing widens the gap further; the watch servicing cost by brand data shows complicated movements from the haute houses cost multiples of a basic Rolex overhaul.

What the data shows that most coverage overlooks

Watch media reports appreciation in headline percentages — “Patek up double digits” — and almost never nets those gains against the three costs that actually determine the owner’s return: transaction spread, carrying cost, and opportunity cost. Run all three and the picture inverts.

The overlooked finding in this dataset is that the watch most likely to function as an investment is also the cheapest one in the analysis, and even it loses to a passive index fund on a risk-adjusted basis. The Submariner’s roughly 53% gain over five years annualizes to about 8.9% — respectable, but below the S&P 500’s 13.6% annualized return over the comparable window, before accounting for the watch’s insurance and storage drag and the equity index’s near-zero carrying cost. The watch that “appreciated” still underperformed the default alternative. And it was the winner. The broader question of whether luxury watches actually appreciate has a data answer, and the answer is: a narrow slice does, most do not, and almost none beat equities after costs.

This is why the price ceiling on the investment thesis is real. As retail price climbs, every cost that erodes return scales up with it, while liquidity — the thing that lets you realize a gain — scales down. The two curves cross somewhere in the low five figures for the most liquid steel sports references, and well below retail for most everything above $100,000.

The $150k+ household calculation

For a household earning $150k or more, the relevant question is rarely whether a watch will appreciate. It is whether the purchase should be underwritten by the “investment” justification at all, or treated honestly as discretionary consumption that happens to retain value better than most luxury goods. Those are different mental accounts, and conflating them leads to overpaying.

The defensible position runs like this. A high-demand steel sports watch in the $8,000–$15,000 band — the kind of piece detailed in a full luxury watch ownership guide — is a consumer good with unusually low net cost of ownership, sometimes near zero or negative if bought at retail and the market cooperates. That is a rational luxury purchase. A $200,000 piece bought primarily as a store of value is a different proposition: it is an illiquid, high-carry asset competing against equities, real estate, and every other deployment of $200,000, and it loses that competition on nearly every measurable axis except the one the brand sells you on — exclusivity. If the buyer wants the object, the buyer should buy the object and stop pretending it is a portfolio allocation. The threshold where the investment framing stops being defensible sits roughly where carrying cost and transaction friction begin to dominate plausible appreciation — for most buyers, that is the point where the watch costs more than a year of the household’s discretionary budget, and where the secondary market for that specific reference is thin enough that selling means waiting.