The inscription read, 'Jack with love always from Marilyn, May 29th 1962'. This declaration of love was etched on the back of a gold Omega watch. From Marilyn Monroe to Jack Kennedy, it fetched $120,000 at auction in 2005. Of course famous names push the price up. But, watches are big business. They fetch high prices at auction and they make fantastic presents. With Christmas on the horizon, here's the low-down on how to pick that perfect present. So, what makes a watch the ideal gift?

The watch was the gift traditionally presented to people retiring after long service. It was given to sons and daughters on graduation. To brides and grooms on marriage. Nowadays it's seen as a status symbol. As Scott Drewell, store manager of Watches of Switzerland flagship store in Knightsbridge, London says, "It's very much the watch that judges you. It's the one big accessory that can tell you so much about someone."

Celebrities have always known the power of the watch. Wearing a Cartier, Patek Philipe or Chanel, speaks volumes.

Steve McQueen had a Rolex named in his honour. James Bond has always been associated with the Omega Seamaster. And Ayrton Senna was the Tag Heuer man. When Sir Edmund Hilary conquered Everest in 1953 he was wearing a Rolex Oyster. And Jackie Kennedy Onassis wore Cartier. Look to Hollywood today and Jennifer Aniston sports a vintage Cartier, the Omega Lady Speedmaster is worn by Cindy Crawford and Nicole Kidman. What all these people know is that watches are an extension of who you are. Sport a watch that speaks of style, sophistication, and quality and to be quite frank it doesn't really matter what else you're wearing.

When you know that watches have cachet then you realise they are the perfect present. But how to choose?

"It's very much the watch that judges you. It's the one big accessory that can tell you so much about someone." Scott Drewell, Watches of Switzerland

If you're going to buy a watch, and make it special, then you're looking at the high end of the market. That means that you will probably be spending about £2,000 upwards. But what you're buying into is a way of life. Like dogs, it's not just for Christmas. A good watch is to be treasured, passed on. Current marketing from Patek Philipe says that you don't own their watches you just wear them and keep them for future generations.

But what are the names to look for? Firstly, Swiss made is the key. However, this doesn't hold true for just one particular company, A. Lange & Sohne. This Dresden based company has a long history of watchmaking. According to Drewell, "They're the best watch making house." Watches start at around £10,000.

Cartier, Chanel, Patek Philipe, Officine Paneria, Omega, Chopard, Breitling, Bouchern, Baume and Mercier and Rolex are just some of the brands worth buying, not just for gifts but also for investment. These watches will always hold their value.

Whilst investment won't be the first thing on your mind when buying as a gift, it's worth noting the sort of prices watches fetch at auction. In 2006 Sothebys held ten watch auctions. They sold 1,473 watches at an average price of £9,847. Christie's also held ten sales, selling 2,811 at an average price of £12,025. Listen to watch collector D.J.Chebaraka who already owns several collectable Omegas, Breitlings and the exclusive Rolex Daytona. He says, "Watches are to be treasured. They give so much pleasure and yet are a fabulous investment at the same time."

So, what's hot on the watch scene for this Christmas? Drewell reckons if you're rushing in on Christmas Eve looking for that perfect gift you can't go wrong with Cartier. He says, "Cartier is always a safe bet. It's very traditional and there's not much to dislike about it." And when you know that Cartier spend a whole day's training on the red box their watches are presented in, you realise there's little left to chance. Cartier prices begin at around £2,500. For something a bit different then Chanel is a good bet starting at around £3,000.

"Sport a watch that speaks of style, sophistication and quality and to be quite frank it doesn't really matter what else you're wearing."

The must have watch for men, which is very exclusive, is the Hublot Big Bang. With only six stockists in the UK, it's almost impossible to find, adding to its desirability. Drewell says, "One just came in after 15 months, and we have a waiting list of 50 people." This all black, ceramic and rubber prototype-looking sports watch retails at £7,600 with the stainless steel version costing £5,000. It's the watch you'll see on the wrists of footballers, musicians and across all walks of life. Another watch that carries cachet is the Rolex Daytona. Drewell says, "Anybody who's anybody must get one. If you see someone, say in the city, wearing one you know he's in the know."

Wearing a good watch gives you presence. Big brands realised this. Louis Vuitton bought Zenith which is considered the watchmaker's watch. In the Open Heart women's watch – a mechanical watch – you can see the beat of the movement, which a lot of people like.

Sports watches are very fashionable. Officine Paneria, now Swiss made, but originally made for the Italian Navy, started the big watch trend. It was only in 1995 they decided to make it a commercial venture. Drewell says, "We're asked for these on a daily basis."

Reinventing the wheel, or the watch, is not easy, but Chanel has come up with a new twist. Through their associations with medical research they've employed a high tech ceramic and used it in their J12 watch. "It really captured the public's imagination," said Drewell. "And for the female market it's absolutely massive." If you opt for Chanel you might consider the ultimate J12 on display in its own case at Watches of Switzerland flagship store. With a baguette cut diamonds it's the only one in the UK and one of only five in the world. But the price tag is £57,000.

With limited editions and such a wide range of good quality watches this is probably the perfect Christmas present. It's something to wear, enjoy and even pass on.

Marilyn knew that a watch was the perfect present. And today that has never been more the case.

By Michele Nevard

Watches of Switzerland, 69 Brompton Road, London, SW3 1DB. 020 7581 7037