The following is my personal commentary on an article published by Financial Planning on May 15, 2025, in which I was featured. This excerpt represents my views on the topic discussed in the original piece. For the complete article, please visit the Financial Planning website.
Recently, I had the opportunity to share my perspective with Financial Planning regarding a fascinating new study from the University of Regensburg in Germany.
The research explored how luxury timepieces—particularly brands like Rolex, Patek Philippe, and Audemars Piguet—might function as effective portfolio diversification tools.
As I mentioned in the article, these findings didn’t surprise me.
They simply validated what many of us working with affluent clients have observed firsthand: select luxury watches can be more than just beautiful accessories—they can serve as thoughtful additions to a diversified investment strategy.
Table of Contents
My Experience With Luxury Watches as Investments
In my practice at RGA Investment Advisors, I’ve guided clients through strategic watch acquisitions. As I stated in the article:
“I’ve personally guided clients through watch acquisitions where the purchase was both an expression of taste and a thoughtful diversification play.”
I also highlighted a specific example:
“The Rolex Submariner index, for example, has shown impressive resilience and long-term appreciation, even across economic cycles.”
This observation stems from years of tracking how certain timepieces perform through varying market conditions. What makes luxury watches particularly interesting as potential portfolio additions isn’t just their value retention but their behavior during market stress periods.
The study confirmed this with data revealing the low volatility of luxury watch returns while maintaining low correlation with traditional asset classes—a combination that’s particularly valuable in diversification theory.
Different Perspectives From Industry Colleagues
The discussion in the article presented multiple viewpoints. Noah Damsky from Marina Wealth Advisors expressed significant skepticism, calling the study “insane” and suggesting it relied on a cherry-picked bull market period.
His perspective offers an important counterpoint—these assets aren’t suitable for everyone and deserve careful consideration before inclusion in any portfolio.
Alex Caswell from Wealth Script Advisors added nuance to the conversation, noting that while similar diversification benefits might exist in other luxury items, the volatility measurements could be misleading due to infrequent price appraisals.
He made an excellent point that these investments work best for clients who already possess knowledge about the specific luxury market.
My Advice to Financial Advisors
My advice to other advisors remains consistent with what I shared in the article. I specifically advised:
“Treat watches like any alternative asset. Do your diligence, understand the market dynamics, and only allocate what you’re comfortable holding long term. These are illiquid assets, but under the right conditions, they can absolutely complement a broader wealth strategy.”
This approach requires advisors to look beyond traditional investment categories and develop expertise in specialized markets.
Any alternative asset—whether fine art, wine, collectible cars, or luxury watches—demands thorough knowledge and careful consideration of market liquidity, authentication processes, storage requirements, and insurance costs.
These practical aspects carry equal weight to potential investment returns when guiding clients on such allocations.
The Importance of Quality and Selectivity
In the article, I emphasized that not all timepieces qualify as investment-grade. I pointed out that “scarcity, provenance, condition, and brand power matter tremendously” in determining which watches might maintain or appreciate in value.
My experience has shown that the distinction between luxury watches as consumer goods versus potential investments is quite stark.
Conclusion
While many high-end timepieces deliver excellent craftsmanship and personal enjoyment, only a select subset demonstrates the market characteristics that make them suitable portfolio considerations.
Brands with historical significance, limited production models, and pieces with exceptional provenance consistently perform best in this regard.
For the right client with appropriate knowledge and in suitable circumstances, certain luxury watches can indeed play a meaningful role in a sophisticated portfolio—though always as a modest allocation within a properly diversified strategy.
This commentary reflects my personal perspective on the topic discussed in an article originally published by Financial Planning on May 15, 2025. To read the complete original article and perspectives from other financial advisors, please visit Financial Planning’s website.