Most collectible watches change hands in what Detroit private dealer and enthusiast Dwight Zahringer describes as a "gray market" of dealer-to-dealer and dealer-to-consumer networks.
A. Lange & Sohne's 1815 Moonphase is one of three limited editions watches to recently sell out.
Zahringer says the key is to buy a watch at the right time—now is one of those times due to the financial crisis-induced slowdown—and have the patience to hold on for months or years to yield a good return.
Engh once bought a watch for $31,000 then sold it a few years later for $100,000.
"Once a watch is sold it creates more demand and raises the price significantly," he says, adding that the Internet helps in communicating sales.
Experts say bargain prices for high-end timepieces are a warning sign of fraud. They recommend patronizing well-known dealers and researching them as much as the timepieces they are selling.
Luxury watchmakers are a good resource for tracking history and authenticity. A. Lange, which produces less than 1,000 watches per year, keeps a history of every watch they’re ever produced as well as a catalog of stolen watches.
The luxury-watch market is large enough to provide ample opportunities for would-be watch investors with realistic expectations.
"Any collectible's value is subject to change due to forces that may or may not be correlated with the economy," says financial advisor and watch collector Barry Zimmerman. "have to understand that not all watches have the same liquidity and valuations can be very subjective."
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