The secondhand luxury watch market has faced a decline since 2022; however, a study by Swiss finance professors suggests that luxury watches, particularly Rolexes, exhibit less volatility compared to real estate and stocks. The lower risk associated with luxury watches could appeal to investors. With low correlation to the stock market, they may offer portfolio diversification benefits despite a reported annual return of 5.68%, falling short of equities and gold. The illiquidity of luxury watches, however, can artificially lower perceived risk due to fewer transactions.
"Overall, the watch market (5.68% annual return) underperformed equities (12.85%) and gold (13.06%) but outperformed fixed income investments."
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