When stock market returns wind up being a disappointment, looking for alternatives becomes the need of the hour. And what better alternative than luxury watches, an investment class immune to fashion and economic cycles.

Watch-buying, long a hobby of the super rich, is now generating interest as an investment class with potential to turn a large profit over time.

Last year alone, Christie’s sold more than $115 million worth of luxury watches at six auctions, two apiece in New York, Geneva and Hong Kong, marking the watch department’s strongest year ever.

The auction house’s timepiece sales registered a 5% year-over-year increase in the first half of 2012, says Doug Escribano, head of sales for Christie’s watch department in New York.

“We follow the market every day,” he says. “In this slow economy it appears people are putting their money into hard assets like watches, jewellery and fine arts instead of stocks or property.”

Typically, these investors have significant disposable income, and won’t mind spending upwards of $40,000, he adds.

While the Americas and Europe remain the largest international clientele Christie’s sells to, in the last few years it’s witnessed steady growth in the emerging markets.

“As the global economy has blossomed, we can say today that [it’s] an international market,” he says. “With the growing economic strength of Asia, we’re seeing a lot more buyers from China, Malaysia and Thailand.”

Popularity is also a function of affordability. Investors don’t have to be big spenders to get in the game.

“You can certainly come to an auction and get in at as low as $1,000 to $1,500,” Escribano says. “But collectibles, those that are $10,000 and up, are really [for] people who have more disposable income.”

Some of the most favoured collectibles, new and vintage, include Patek Philippe, Rolex, Vacheron Constantin and Audemars Piguet.

Judging by historical trends, these timepieces are almost guaranteed to appreciate over time.

Apart from the maker of the watch, Escribano says, other key factors to look for are rarity, quality, and condition.

“With collectors and passionate watch people, it’s really about the quality overall,” he says. “If it’s a $50,000 watch, and it’s in pristine condition, you can sell it for any price; if it’s not in good condition you may not sell it.”

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Rolex Cosmograph Daytona in everose gold

Photo courtesy of Rolex

Patek Philippe 2012 models

Photo courtesy of Patek Philippe

1943 Patek Philippe,
sold for $5.7 million in 2010

Photo courtesy of Patek Philippe

1928 Patek Philippe watch

Photo courtesy of Patek Philippe

Rolex Lady Datejust in Rolesor

Photo courtesy of Rolex