There are different ways of looking at which breeds make the best watchdogs. You need to consider your family and what else you may wish from your dog. Do you want it to be a watch dog and a guard dog, There is no point in having a savage breed if you want it as a family pet as well. Another thought is do you just want the dog to alert you, In this case you can have some of the very friendly breeds that just welcome anybody in a boisterous fashion, which will effectively alert you to a presence.
If you require a watch dog and guard dog that is not going to be a family pet you may decide on some of the instinctive watchdogs, like pit bull terriers, Dobermans, (which if handled very well can be pets as well) or if you are really getting carried away, a breed more like the Czechoslovakian Wolfdog (be aware this was originally bred for border patrols and is a dangerous dog).
The most common breed for a watch dog would probably be Alsatians, Rottweilers, and huskies. All these breeds are powerful and guarding dogs as well as instinctive watchdogs. They are very capable of looking after you when you investigate any problems. As with all dogs they must be properly trained and exercised, or you will have problems with the dog yourself. You must be their pack leader, or they will try to control the house, this is also true for small dogs.