"People don't buy modern watches as investments - you buy because you enjoy wearing them," says Oliver Saunders, head of watches at Christie's. "If you laid out £35,000 on a watch 10 years ago, it's probably only now returning to that value. For investment purposes, buy at auction so someone else has suffered the depreciation. As long as you're sensible, it will go up in value - we are selling watches that retailed at £21,000, for up to £4,000, and that makes them a very good buy."
Paul Maudsley, of Bonhams, shares this view. "We have a client who spent £245,000 on a Patek Philippe minute-repeating watch from Asprey, and it's worth about £120,000 at the moment," he says. "However, watches from the Fifties are selling for £300,000-£400,000, so it's all about how long you can afford to wait."
The good news for such sellers is that the watch market is booming. " Over the last two years, huge prices have been achieved on some very rare watches," adds Maudsley. The one exception to the "don't buy retail for investment" rule is the most desirable watch currently available, the Rolex Daytona in stainless steel. The latest model retails at £3,600, but there's a two-year waiting list, so those people who have got one can sell them for an average of £6,200.
Otherwise, ignore retail prices. Be particularly wary of modern limited editions, says Saunders, as these are generally overpriced: "They're not good investments, as they seem to have an exaggerated price put on them that doesn't relate to the secondary-market price," he warns.
Fashion can be a key issue. Watches that were produced in small quantities because they weren't popular can turn out to be good investments over the long term. "For example, the Rolex Milgauss was designed for people working in laboratories, where high magnetism would be detrimental to the watch's timekeeping," says Saunders. "A client bought one in 1988 for £99, but it was first produced in 1968 when it would cost around £150. They are now selling for £13,500."
It's not just the top-end of the watch market where investment opportunities exist. Although the major dealer in London for Swatch watches has now closed, there's a thriving market on online auction site eBay "But they must be in unopened boxes - if a Swatch has been worn, forget about selling it for big money," says Maudsley.
In practice, the big-brand names hold their value best. Rolex, Patek Philippe, Cartier, Vacheron Constantin and Breguet are good bets, while fashion watches from clothing labels such as Versace, Gucci and Burberry are viewed by collectors as costume jewellery, so make less attractive investments.
Don't consider a plated watch, because it can't be overhauled and maintained. Also, if a watch is gold, make sure that it's 18 carat rather than nine, though yellow gold isn't the best anyway. "Steel, white gold or platinum are more fashionable now," says Maudsley. A rare stainless-steel version of a Rolex Chronograph sold for half a million pounds in Geneva.
Oliver Saunders advises collectors to think laterally. "People like the boxes and ephemera that go with watches, and, generally speaking, avoid gold bracelets and integral bracelets - leather straps are far more in favour," he says.
As with any market dictated by fashion, watch prices go up and down, but at least you can wear it while waiting for it to appreciate. "Wear a watch for a few years, take it for a service and overhaul, and it will be back to its original condition," says Maudsley.