The economy suffers in exceptional situations such as the current ongoing crisis with the coronavirus. Stock markets are struggling, self-employed people have existential concerns and many people are worried about their savings. To invest money safely, some people buy high-quality timepieces. But are luxury watches a sensible and worthwhile investment even in times of crisis?
Are luxury watches a worthwhile investment during a time of crisis?
Many people had doubts at the beginning of the current crisis: is an investment in various Rolex steel models and the occasional collector's item still secure in times of crisis? And if not, would it be reasonable to buy watches for less now and hope for gigantic returns later on?
In order for this to occur, numerous collectors would have to run into financial difficulties and consequently sell their beloved watches for cash. At the same time, watch manufacturers would have to flood the market with luxury watches – even if, on the other hand, interest in luxury watches were to disappear. If this rather unlikely scenario were to occur, one could certainly get a Daytona, Pepsi, Nautilus or equally coveted models at a very reasonable price. In order for the desired returns to materialize, however, numerous watches would have to disappear from the market again, production figures would have to be cut back and the interest in fine timepieces would have to increase. Only then, would it be possible to earn a small fortune virtually overnight.
ROLEX DAYTONA 116500LN | ROLEX GMT-Master II 126710BLRO
To hope and speculate on this kind of development is just as promising as betting on a lame horse in horse racing. Of course this may work, but let's be honest: the chances are not very good.
What about the stability of value of luxury watches?Almost all of the major Swiss watch manufacturers had to stop production for some time in mid-March. This meant that no new watches could be produced and sold. As a result, availability shrank so that there is almost a shortage. Waiting lists are getting longer and the shops, even if they are allowed to reopen, are still waiting on certain models.
Does this mean that the value of luxury watches will increase in times of crisis? In light of the circumstances described above, this would be the logical consequence, wouldn't it? Here, too, this is more wishful thinking than reality, as various studies from a wide variety of platforms tell a different story. According to these studies, only minor fluctuations in the fluctuation of value of luxury watches have been observed. Still, fashion and current trends play a major role, so this is exactly what we should be looking at.
Instead of suddenly generating astronomical profits or experiencing an enormous drop in prices, some particularly timeless luxury watches have proven to be extremely stable in value – even in exceptional situations such as a pandemic. This should actually be a reason to jump for joy, were it not for the fact that some previously very popular watches have slightly fallen in value. Still, the prices of these models are well above the list price, but are currently slightly lower than before.
ROLEX DAYTONA 116520
Will the Rolex bubble burst?Let us reassure you: frequent discussions and the fear that the Rolex price bubble will burst is, in our opinion, rather unlikely for the time being. Contrary to fears that interest in luxury goods such as a Rolex watch might decline in times of crisis, during the current Covid-19 pandemic we have noticed a growing interest in watches as an investment.
Moreover, Rolex faces a shortage of supply due to the lower annual production due to pandemic and lockdown. Accordingly, the value of the Rolex collection will certainly not fall dramatically in the near future. And even if your GMT-Master II (Ref. 126710BLRO) is subject to slight price fluctuations, this is completely normal and no reason to worry. The model in question, for example, is still traded well above the list price – like many other luxury watches. Although no one can predict the future, it is unlikely that the Rolex bubble will actually burst.
5 of the most stable investments for watches at Watchmaster
Since we have already revealed that some watches are particularly stable in value, we naturally do not wish to hide these models fr watches are particularly stable in value, we naturally do not wish to hide these models from you. Therefore, let's have a look at a small selection of the most stable investments from Watchmaster. It is important to note that the following models are regarded as timeless classics of Haute Horlogerie due to their unmistakable design or impressive history and thereby remain stable in value even during times of crisis.
- Unrivalled beauty: the Rolex Datejust. The reference 1601 in particular is often traded as the entry-level Rolex and usually holds a constant price of between € 3,500 and € 4,000 for the willing buyer despite its age and the frequent incompleteness on delivery. Why? The design of the 1601 is considered to be particularly timeless and elegant. As this reference has not been produced for a long time, it is unfazed by the changing trends.
- Reliable high-quality workmanship: the Rolex Explorer II (Ref. 16570). As a classic, sleek sports watch, it remains true to its image – a fact that has been lauded by fans of the Rolex brand. The Ref. 16570 remains consistent at a value of € 6,500 to € 6,750. As one of the most robust designs from Rolex, the Explorer II has already proven to be an extremely reliable companion in the past and has faithfully performed during polar expeditions, for example. Even today, in times of crisis, it continues to demonstrate this and is a reliable everyday companion.
- Not of this world: the Omega Speedmaster Moonwatch. Thanks to the now well-known history of this model, the Moonwatch enjoys enormous popularity not only in exceptional situations. While records are constantly being set and broken, nothing and no one can deny the success of the Omega Speedmaster Moonwatch as the first watch on the moon. Depending on its age and model, the Moonwatch either maintains constant value or has even increased significantly compared to its original purchase price.
- Captain Nemo sends his regards: the Rolex Submariner. This classic from the upper tier of the luxury watch segment continually demonstrates its right to be at the top of the watch market – even in crisis situations. The timeless and much-copied design, similar to that of the aforementioned 1601, is considered absolutely iconic in the watch world and is highly valued. Regardless of age, reference number or trends, the Submariner counts as a superb addition to any watch collection, making it a stable investment.
- A true trendsetter: the Patek Philippe Nautilus. As one of the most popular watches of our time, this luxury timepiece from Geneva proves its many virtues not only in times of crisis. The Nautilus, developed by design legend Gérald Genta, has experienced an immense increase in value in recent years and is regarded as a very safe investment. With a list price of around € 27,550 and second-hand prices of sometimes more than € 60,000, the Nautilus (Ref. 7511/1A) made of stainless steel with date display is one of the most worthwhile investments of our time – assuming you can purchase a copy at list price. Otherwise, you can be sure that the Nautilus will not incur a loss if you resell your timepiece.
Watchmaster Tip: Keep an eye on series that are said to be discontinued. Rumours like this are currently circulating about the Rolex Air-King, for example. Should the series actually be discontinued in the near future, this could increase the appeal and value of the watches.
PATEK PHILIPPE NAUTILUS 37101A-001
Should I invest in a luxury watch – yes or no?
Luxury watches can be a stable and worthwhile investment even in times of crisis. According to certain studies, it is particularly important to focus on timeless, classic designs that will continue to be regarded as elegant in the future. However, for short-term investments and quick returns, current trends such as colourful Rolex models can be a worthwhile investment, but speculators have little success on account of the long waiting lists.
It is best to stick with the classic, iconic designs from the major Swiss luxury brands. Then, you can be best assured that your money is safely invested even in times of crisis. But remember that "safe" is not the same as "making a profit". In the watch market, a safe investment usually means that you can sell your watch again at any time at a fair price that reflects your original expenditure.