Real estate as an investment? One study says luxury watches do better.

• The secondhand luxury watch market has been on a decline since 2022.
• Still, one study contends that luxury watches like Rolexes have less volatility.
• The study also found that high-end watches saw more average annual returns than real estate.

In a period of tariff whiplash and geopolitical uncertainty pushing the S&P 500 into a stock market correction, the luxury watch could stand the test of time.

A recent study by two Swissfinance professors contends that luxury watches saw less market volatility than real estate, stocks, and “fixed income” or bonds when examining various indices that track the performance of those assets between January 2019 and September 2024.

The study’s findings suggested that high-end timepieces could be an “attractive option” for investors looking to diversify their portfolios because they have a low correlation with the stock market, making them lower-risk investments.

“The watch market’s volatility (3.90% annual volatility) and range are the lowest of any asset class,” the study, which was published February 24 on Social Science Research Network, said. “The closest asset class in terms of risk is fixed income, with a volatility of 5 to 8%.”​

Philippe Weisskopf, assistant professor of finance who co-authored the paper with his colleague at EHL Hospitality Business School, Philippe Masset, told Business Insider in an interview that one caveat to the findings is that luxury watches are illiquid, meaning people aren’t selling off their watches as quickly as they could with stocks.

“There are not that many transactions, and this kind of artificially lowers the risk a little bit,” Weisskopf said, adding that he and his colleague tried to account for this issue by excluding data that looked at daily price movements.

Returns from luxury watches also tell a mixed story.

“Overall, the watch market (5.68% annual return) underperformed equities (12.85%) and gold (13.06%) but outperformed fixed income (negative returns) and real estate (3.14%),” the study said.

Some brands, however, came close to the average annual returns seen on the MSCI World Index, which the study used as a measure of global stock market performance.

Audemars Piguet showed 11.68% in average annual returns, whereas stocks showed 12.85% in annual returns. Patek Philippe showed average annual returns of 10.92%, according to the study.

Weisskopf notes that brand knowledge and knowledge of specific models within brands are crucial when looking into luxury watch investments.

The Rolex Recession

The study’s conclusion factors in the decline of the secondhand watch market in the past three years.

The resale market saw a huge boom in 2022, with the price of a secondhand Rolex Daytona climbing to its peak in March of that year at $48,500 — a nearly 228% markup from its retail price of $14,800 in 2023, according to WatchCharts.

Today, the estimated cost of a resale Daytona would be $27,052 WatchCharts data showed. That still represents about an 83% price increase.

Weisskopf’s study said brands like Rolex and Vacheron Constantin showed a return of more than 50% after 2022.

“Meanwhile, Audemars Piguet and Patek Philippe, which are the best-performing brands, tripled in price between 2019 and 2022,” the study said. “However, the two brands roughly doubled over the total period (i.e. from January 2019 to September 2024).”

Weisskopf noted during the interview that although the paper’s findings point to luxury watches as a better long-term investment,the study should not be taken as investment advice.

“From a financial economist point of view, I’d say I don’t see how the watch market could turn around a lot right now if you look at what’s happening throughout this globe, politically, geopolitically, economically speaking,” he said. “I think, right now, a lot of people are rather paying a bit more attention to where they put their money. So I don’t think it’s going to go up. Is it going to stabilize? Maybe.”