At the Bonhams sale of Fine Watches and Wristwatches in Manhattan this past June, a circa-1952, 18-karat gold, triple-calendar Rolex chronograph sold for $103,700, the event’s highest price. A rare item from a respected brand, the watch had only one owner and still had its original dial, and its mechanisms were in good working order. For those reasons, the winning bid fell right in line with the watch’s presale estimated value of $80,000 to $120,000. But the Rolex was not the talk of the auction.

That distinction belonged to an 18-karat gold Patek Philippe Golden Rule wristwatch from 1955. This limited-edition timepiece, considered one of the finest self-winding watches that Patek ever produced, is named for the maxim etched into its face: "Do unto others as you would have them do unto you." Most examples of this model would sell for about $15,000, assuming they were in good condition. But this particular watch was gifted by then-senator Lyndon Johnson to fellow U.S. senator and political ally George Smathers, in 1956. The LBJ association lent the piece greater significance and thus intensified the bidding. The watch ultimately fetched $33,550, more than double its presale estimate.

Each of these timepieces embodies characteristics that any collector of any items values: an authenticated provenance—and in the case of the Golden Rule watch, a provenance that includes a significant historical figure—rarity, and good condition.

Market Maturity
The vintage watch collecting market has taken off in the last 10 to 15 years in part because of the extensive information about watches that’s available online to collectors. But as Sam Hines, vice president of Christie’s New York (www.christies.com), explains, the Internet can be a double-edged sword if you’re seeking to educate yourself about vintage watches. "Five years ago, the knowledge that collectors have today didn’t really exist," says Hines. "That’s grown with technology and the online community that’s intertwined with watch collecting and the technical aspects of watches themselves." But, he cautions, the Web also contains lots of information about watches that is misleading, inaccurate, or unsubstantiated. "Collectors should do as much research as possible," Hines continues. "We want to build relationships with our clients and collectors, so it’s always good to give us a call. If you’re going to an auction house, we’re giving you our honest opinion."

Through the Internet, you quickly can ascertain how many examples of a particular watch exist, a factor that of course will affect its value greatly. One way is through Web-based forums hosted by the brands themselves. There you can find information and advice that wasn’t so readily available a decade ago.

In the mid-1990s, for example, a Patek Philippe water-resistant chronograph may have sold for $20,000 or $30,000. Today, however, a collector could easily learn that because of its water-resistant case, the watch was part of an extremely limited edition and might be worth $100,000 or more. "Rarity is so important in vintage watch collecting if you’re looking to enjoy your watch, but also for it to appreciate over time," Hines says.

Condition, Condition, Condition
While rarity is significant, sometimes a watch’s condition can have an even greater impact on its value. "I don’t buy anything that’s not absolutely perfect," says Michael Ashton (www.michaelashtonwatches.com), who buys and sells vintage watches at his namesake shop in Manhattan. "I’ll have an easier time selling a watch that’s perfect, and I’ll have an easier time getting a premium when I pay a premium."

Hines says that five years ago, a pristine watch could sell for 10 percent to 15 percent more than the same model in average condition; but today, condition has become so valued that a pristine watch might sell for twice the price of an average-condition watch.

To determine the condition of a watch, Ashton suggests, you first should examine the case, specifically the hallmark stamped by the manufacturer. If the case is made from a precious metal—rose gold, yellow gold, or platinum—that hallmark will fade with excessive polishing. And the more a watch has been polished, the more its value decreases.

According to Paul Maudsley, the director of Bonhams’ watch department (www.bonhams.com), an original dial in good condition is of the utmost importance. "You look for the originality [of the dial]," he says. "You don’t mind a little bit of bodywork damage, but you want the engine to be okay. The bodywork can be repaired. If the dial is good, it’s still a good watch to buy, because there are lots of things that can be done."

To any would-be vintage-watch collector, Jonathan Snellenburg, the director of watches and clocks for Bonhams New York, issues a caveat emptor: "Someone who is buying a vintage watch should be fully aware that he’s buying a previously owned mechanism," says Snellenburg. "Buy it with the understanding that it may need restoration and overhaul. And even if you buy it in beautiful condition and running, in a few years it will still need maintenance."

The Best Return
Rolex and Patek Philippe are among the most sought-after brands of vintage watches. In fact, they’re the only brands that Michael Ashton acquires and offers. Snellenburg notes that those brands are valued because of the sportiness, durability, and style of Rolex’s watches and the variety of time-tested movements and complicated mechanisms found in Patek watches.

Complications almost invariably translate into investment value. A chronograph with a perpetual calendar, for example, will appreciate much faster than a more basic watch. "The more complicated the watch is, the higher the return in the future," Hines says.

For the most part, however, predicting the demand for a watch 10 or 15 years from now is a crapshoot. Some watches that were produced in limited supplies in the 1940s, ’50s, and ’60s might surge in popularity, but for all the stories of limited-edition pieces appreciating exponentially, there also are tales of equally limited models that draw little interest. But in many instances, supplies of the latter watches are limited because their initial lack of popularity prompted their brands to discontinue them. Time hasn’t made them any more desirable. "Consider the appearance of the watch," Snellenburg says. "If it’s something that you don’t enjoy looking at and wearing, there’s really no point in owning it. Buy it because you like it and you want it, and take good care of it."

If you do like a watch, says Ashton, and it’s a rarity that’s in pristine condition, be prepared to spend whatever it takes to acquire it. "You’re lucky if you ever see it again," he says. "There are a lot of collectors who don’t like to sell. The collectors that are really into collecting are buying it just because they love it."