By Stacy Perman
June 2, 2014

Once the cosseted pursuit of a small number of deep-pocket connoisseurs, timepieces have emerged in the wake of the global recession — along with contemporary art — as a popular new alternative asset class, and prices have been soaring.

At auction, Patek Philippe and Rolex remain hot items. Last year Christie’s marked its fifth consecutive year of record-breaking sales. In 2012, Gordon Bethune, the former chief of Continental Airlines, sold 50 of his vintage Pateks, Rolexes, and Vacheron Constantins at Christie’s for $5.67 million — double the low-end estimate for the sale. And in May, a Patek ref. 2499, encased in 18-karat gold, sold for $524,930 at Antiquorum, almost double its high-end estimate.

Like a Picasso or a Pollock, select timepieces have appreciated handsomely over time. A rare vintage Rolex with a cloisonné enamel dial that 10 years ago would have sold for $30,000 to $40,000 can now fetch anywhere from $500,000 to $1 million. In May a Rolex Oyster Perpetual with such a dial hammered down at Christie’s in Geneva for $1.23 million.

One Patek collector, the CEO of a multinational construction company, maintains a collection of vintage pieces from the 1920s and 1930s worth $20 million. He points to a timepiece he purchased in 2004 for $140,000 that’s worth $600,000 today. “It’s grown that much in 10 years,” he says. And he notes an added benefit: Wristwatches are international portable currency. “I can literally transport an asset worth millions of dollars on my wrist,” he says. “This is an asset to be passed on to the next generation, but it flies under the radar. It’s not like stocks or real estate or most interest assets that are highly tracked.”

Not yet, anyway.

This story is from the June 16, 2014 issue of Fortune.

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