Stepping up and making your first big watch purchase can be a daunting task, and frankly the story we hear far too often from long standing collectors is this: “If only I knew then what I know now...”

Much like any other luxury good out there, buying smart requires a bit of an education. Sure, you can walk right into your local Rolex, Omega, or IWC boutique and just buy that new piece that caught your eye, but if you don’t choose wisely you’re going to lose your shirt. Not all watches are created equal, and similarly to the luxury car market, not all high end watches depreciate equally, either.

Full disclosure, if you’re looking at your first luxury watch purchase primarily as an investment that will be worth a ton more when you choose to sell it, look elsewhere. Yes, there are watches that gain value over time — the Patek Philippe Nautilus reference 5711 is presently selling for often more than double its retail price — and both modern and vintage examples of the Rolex Daytona have been skyrocketing (retail on the modern Daytona is $12,400, but good luck finding one for less than a 60 or 70% premium).

However, if you’re playing in the ballpark below $10-$15,000 your options are pretty scarce. That said, if you love watches and the craft of watchmaking, you can be steered in a direction where at the very least you’re not going to make a poor purchase.

Aiming for the ballpark of up to/around $5,000, here are the luxury watches (new, old, and pre-owned) that we would suggest looking at.

Almost Any Steel Rolex

Vague as the answer sounds, these days it’s pretty hard to go wrong when looking at any of the modern steel Rolex catalog — whether you’re talking about a GMT-Master II, Submariner, Explorer, or even an Air King.

Rolex has been throttling production in recent years, which has consequently driven up prices even in the secondary market. Case in point, the "Pepsi-bezel" GMT-Master II that launched last year is supposed to carry a retail price of $9,250. Steep for and entry-level piece, for sure, but the wild part is these watches are in such high demand that they’re presently trading hands for over $20k on the open market.

For something a little more palatable, you can get yourself into something like a Rolex Explorer, or Air King closer to the $5,000 mark, and whether you hang onto it for a few years or a decade or two, odds are you at the very least won’t lose money on it.

Limited Edition Luxury Watches

Once again we’re casting a pretty broad umbrella here, but there are some specific criteria to follow for this to work in your favor.

First things first, any limited edition that’s being offered in the thousands and thousands of examples, isn’t really limited and should be struck from consideration if maintaining or gaining value is a consideration. The lower the count, the better off you are, regardless of the entry price of the watch in question.

Items like Panerai’s limited edition bronze watches, or Omega’s “Speedy Tuesday” limited releases that were launched online have all performed well over the years, but even in more approachable price points you’ll occasionally see very limited pieces perform very well when it comes to value retention.

Prime examples include low-volume indie brands like Halios and Ming, both of which continue to have far more demand than supply. On the other end of the spectrum, Zodiac watches (an obscure and well-executed arm of the Fossil Group) has had a handful of limited-edition releases that continue to be popular — the rare instances they come up for sale via the watch sales/trading forums (watchuseek, etc.).

A particular example being the Super Sea Wolf 68 in Bronze, of which only 82 examples were ever made. Priced just a hair over $2,000 it was a bit steeper than their usual offerings, but since selling out they’re just about impossible to track down, with the only example we’ve seen recently sitting on eBay for $3,995.

Buying Vintage (DO YOUR HOMEWORK)

Ask any watch collector and he’ll no doubt tell you that the vintage luxury watch market has been on fire these last few years. With Phillips and Christie’s Auctions seeing crazier and crazier sales results — and more and more people getting into the business of buying and selling vintage watches — there’s a ton to choose from, but also a lot of risks involved.

If you’re going to do it, you need to stick with a retailer you know you can trust, otherwise your odds of getting burned with a piece that either isn’t in original condition or has mechanical issues (or worse, both) are VERY high (we’re going to dig into the “where to buy” part next week).

Knowing where you’re buying is one thing, but knowing what to buy is another. A lot of less mainstream brands are continuing to ramp up in price — brands like Yema, Wittnauer, and others have gone from unknown and undesirable to new and hot. Meanwhile the vintage archives from more mainstream brands are continuing to ramp up as well. Vintage watches from Heuer and Breitling, old Omega chronographs, and even an assortment of Bulova watches from the ‘60s and '70s are worth more than they were just a few years back.

At the end of the day we'll always say that you need to shop watches with your heart in mind more so than your retirement plan, but if you keep an ear to the ground and pull the trigger at the right time, you can at least avoid massive depreciation on that first big luxury watch purchase.

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