Is It Worth Investing In Fine Watches In A Crisis?
The Covid-19 pandemic has had an enormous adverse impact on everything - not only every person on earth, but homes, businesses, cars, travel – everything, even jewellery.
However, all is not lost, because a luxury watch retailer says that this is the time to invest in watches. Even though many people believed that the pandemic would almost break this sector, was correct. However, irrespective of the huge market downturn, people are still spending their money on watches, and contrary to the belief, watches are just as popular and pricey as they were before the pandemic!
Watches Are Good Investments
There are watches on the market to suit all tastes and budgets, from those costing around $5000 to those with price tags going way beyond the $100,000 mark! With watch sales shooting through the roof, many investors are turning towards luxury watches now to avoid the stock market!
Why Do People Buy Luxury Watches During A Financial Crisis?
Watches have a lot going for them. Not only are they great fashion accessories, but these days, some of them are highly technological items that are even used in sporting competitions. Bold investors and others wanting to protect the value of their money, are turning to watches as alternative, rewarding investments.
Take Paul Newman’s 1968 Rolex Daytona for instance, that was sold at the unbelievably high price of $17.8 million, and had punters jostling to buy vintage watches from exclusive brands like Rolex and Patek Philippe. Even though some say that the enormous price was thanks to Paul Newman’s fame, exclusive watches remain a solid purchase for many investors.
Above is Paul Newman's own Rolex Cosmograph Daytona Reference 6239 (photo by Henry Leutwyler.
Watches, unlike other types of investments, rely on trends and changing market opinions. Even though exclusive watches are fabulous works of art, made with many hours of extensive labour, they are still simply an accessory. Their real value is a lot less than other investments like property and cars, for example.
However, an exclusive, expensive watch hardly ever depreciates in value and need significantly less maintenance, unlike a Lamborghini or a penthouse in New York.
Things To Consider If You Plan On Investing In Fine Watches
Irrespective of the brand of watch you want to invest in, there are certain important points to consider when investing in watches, including:
Start your collection with the brands you know – if you’re a first-time investor, then it’s advisable to stick to the brands you’re familiar with, like Patek Philippe and Rolex. You have little chance of making a mistake if you invest in exclusive watches like Patek Philippe’s magnificent Nautilus or the exquisite Rolex Submariner. In addition to this, as with the outstanding sale of Paul Newman’s Daytona, you are almost guaranteed, that the price you pay for a Rolex will increase steadily over the years.
According to the experts, investors adore those classic, sought-after timepieces, and if you take the plunge and buy these luxury watches for your collection, it will be money extremely well spent!
Do your research! – Research is essential for any investment, and it’s vital to get your groundwork done if you want to be successful. Some first-timers have made the mistake of buying a watch with an exceptionally high price, believing that it will be a good investment. However, this is an expensive mistake that can be avoided with research.
So, spend some time doing research. Speak to watch experts or other investors about which timepiece you should invest in. Punters are normally ahead of things. For instance, prior to Paul Newman’s Rolex Daytona being sold, it was frequently considered an undesirable investment and sold for about half price.
The thing is many investors forgot about the celebrity factor. Suddenly it hit them - this watch was worn by no other than Paul Newman, the coolest man in the world, adored by millions of women all over the world! These days, the Rolex Daytona, that started out as an ordinary sport watch, has investors prepared to wait for ten years to own one! Don’t ever forget that!
Consider the discontinued timepieces – it is a known fact that demand increases when supply falls, and the same applies when you invest in watches. Vintage investments are popular in the market because they are in limited supply and the same goes for cars, antique furniture, wine, and watches.
Even though the price of a vintage timepiece is too expensive for most of us, it is worthwhile looking into watches that are almost at the end of their production run. Usually, these watches are reasonably priced, which makes them good as a one-time purchase. In addition to this, because it is a discontinued line, there is a sudden drop in supply, which can result in the prices increasing and allowing the value of your investment to appreciate.
If Watch Factories Are Closed Because Of The Pandemic, How Will It Affect Investment In Watches?
Even though watch factories like Rolex, Patek Philippe, Hublot, and Audemars Piguet have stopped production for the time being, the experts say that it’s the perfect time to buy watches while stocks are available.
Many investors are clamouring for these watches, especially Rolex and Patek Philippe, so much so, that there are long waiting lists for these timepieces. This contradicts the fact that these pieces can sell for more than twice their retail value on the secondary market. Watch prices are remaining steady for now.
When things start settling down again, it’s quite possible that these manufacturers increase their prices to recoup the money they lost during the pandemic. Investors have been feeling out of luck lately, because of the currency exchange and stock markets taking such huge knocks.
However, watch prices are steady, so it’s the perfect time to invest in another timepiece for your collection. There is the possibility, that when the pandemic is over, and life has returned to normal, an increase in price would be in order, which will result in an increase in the value of preowned watches.
Rolex and Patek Philippe watches are considered by many to be the best for buying as investments. Since both factories are closed now, and the waiting list growing longer, some people will probably be reluctant to wait any longer, which will force them to start buying preowned timepieces.
With everyone in lockdown because of Covid-19, those rare, hard-to-come-by timepieces might very well become a lot easier to find at this time.
Buying luxury watches as an investment can be extremely rewarding from a financial point of view. With patience, thorough research, and some careful investment, you should have no problem building a solid and financially rewarding watch collection.
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