Mz97xnif danny shahid at dwls flagship store in mayfairs burlington arcade
Danny Shahid at DWL.

Rolex watches could be a safe haven amid economic chaos, trader suggests

The weakness of the pound, or more fairly the strength of the dollar, is making the UK an attractive place to shop for overseas visitors, and luxury watches are a great place to park money.

As I write, the question in the air is whether the shelf life of Liz Truss as prime minister is longer than a lettuce.

Should the lettuce win, we will be in for our third PM this year.

Regardless of the political shenanigans, the markets are in turmoil while the political chaos continues.

The weakness of the pound, or more fairly the strength of the dollar, is making the UK an attractive place to shop for overseas visitors, and luxury watches are a great place to park money, even for British residents, according to Danny Shahid’s, owner of DWL, which has a pre-owned watch shop in Mayfair’s Burlington Arcade.

“As a result of the pound falling, the luxury watches being sold by secondary market and authorised dealers in the UK were suddenly being discounted for global clients whose home currencies have seen their value rise against the pound during its decline. The current climate still represents one of the best opportunities to buy a watch in the UK for anyone who holds a significant amount of foreign currency,” Mr Shahid writes.

“With the pound’s value still in recovery, now might be considered a poor time to sell a watch in the UK. As a luxury timepiece is an asset, it stores value irrespective of the currency with which it was traded but to a certain extent the value will keep up with inflation. If a currency devalues, then the watch is worth more of that currency. As selling your watch means converting a relatively stable asset into cash, this is unlikely to be the best strategy unless you have a plan to use that cash in the short term to invest in another asset likely to yield a higher return,” he advises.

“Sports model Rolexes are always a safe haven for watch investments,” Mr Shahid continues. “With the Submariner, GMT-Master II, Daytona and Sky-Dweller all experiencing significant sales volumes over the past few years and substantial premiums over their retail prices. While these premiums have fallen in recent months, they have maintained a healthy level of resistance to the economic turmoil and remain sound investment timepieces.”

In addition to Rolex, other luxury brands are seeing demand rising.

“We believe the Cartier Santos and Vacheron Constantin Overseas also make smart investment choices at the moment. These watches both experienced massive surges in demand and popularity during the end of 2021 and the beginning of this year, but the economic slow-down has caused them to fall in value rather significantly. As a result, they are relatively undervalued considering how high they could go if the trend for stainless steel integrated bracelet sports watches continues over the next few years, which seems highly likely. We’d recommend opting for blue dials on both models, as well as black for the Vacheron Constantin Overseas and white for the Santos,” Mr Shahid suggests.

“With the pound’s uncertainty and economic unrest scaring many potential buyers out of the market, there is plenty of opportunity for anyone who has the confidence and willingness to take on risks that others are shying away from. As American business magnate Warren Buffet once said, investors should be “fearful when others are greedy, and greedy when others are fearful,” he concludes.

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