Need to make a profit? All in good time

Need to make a profit? All in good time

If you'd prefer to invest in something that is practical and looks good, why not put your money into something timeless - a fine watch? At the very top end, a rare Patek Philippe can set you back more than you'd pay for a three-bed detached house in Reading.

However, for those with a more modest £500-£5,000, watches have been offering well-timed returns.

Paul Maudsley, head of watches at auctioneer Bonhams, says the sector has been going through something of a renaissance and, as a result, prices are ticking up.

"A few years ago, if you said at a dinner party you sold watches for a living no one was interested.

"Now everyone wants to talk about watches - and more importantly they are buying them. Our most recent fine watch sale in June was particularly successful, and the signs for future prices are good."

He says a client who bought a Rolex GMT-Master last year for £5,500 has just sold it for £11,000. Sports, military and chronograph watches are all sought after.

"As with all investments, you have to do your research and study the market. If you buy wisely you should be rewarded with a very solid return."

He cites the example of the Rolex Submariner that would have sold for around £200 brand new in 1972 - not an inconsiderable sum back then. These, he says, now sell for between £10,000 and £15,000, depending on condition.

John Matheou, founder of the Swiss Watch Company (watches.co.uk).....continued below

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and a dealer for some 14 years, agrees the market is buoyant. "The credit crunch doesn't seem to have affected us. Fine watches are very fashionable and we've never been busier. Prices for some watches have doubled in the past 12 months and, like other markets where there is only a limited number available, prices have to go up."

Overall, the general advice is to seek used (pre-owned) models if buying for investment purposes - watches like cars depreciate a huge amount as soon as you first wear them.

Reports of watches being sold by smart Bond Street stores for £21,000 and being worth £5,000 a year later are not uncommon - making them, at that later stage, an excellent investment.

In practice, the big-brand names hold their value best. Rolex, Patek Philippe, Cartier, Vacheron Constantin and Breguet are good bets, while watches from fashion labels are viewed as costume jewellery, and as such should be avoided.

So what should those with a few thousand, or a few hundred pounds, put their money into?

John Matheou thinks the Panerai Radiomir is the best place for those with £6,000-£7,000 to invest - he's just bought one for his recently born son and expects it to be worth £20,000-£30,000 by the time he's 18.

"Failing that, you can't go wrong with Rolexes which are perennially popular with male buyers," he says.

"If you are looking to spend just £500-£700 I would go for an early 1970s Omega," says Paul Maudsley. "Omega has just set up its own vintage shop in the Burlington Arcade (in Mayfair) and prices are expected to rise.

"Buy something you like and wear it for a few years. If you take it for a service and overhaul, it will be back to its original condition - and worth a bit more than you paid for it."

· Bonhams' next general watch sale is on September 16 - its next fine watch sale is on December 11.

m.brignall@guardian.co.uk