The economic outlook is relatively gloomy and the prices of some luxury watches are starting to fall. DWL’s Danny Shahid explores whether or not now is a good time to invest in a high end timepiece.
If given a long enough period of time, the vast majority of watches rise in value.
There are occasional dips, as we are seeing at the moment in many cases, but typically speaking the watch market has been on an upward trajectory for a long time.
Indeed, it has flourished since the onset of the pandemic because demand has outstripped supply.
Take a standard two-tone 36mm champagne diamond dial Rolex Datejust ref. 116233, for example.
It is not a premier investment-grade timepiece by any means, but it provides quite a clear view of the overall watch market in that it has experienced peaks and troughs over the last ten years with a definite increase in value.
The recent dip is steep but, bearing in mind how fast it gained value, a retrenchment was to be expected — like in the wider market. How long it will take to recover is the unknown variable.
Interestingly, the Rolex Submariner Date ref. 16610LN significantly increased in value between mid-2009 and early 2012, a time when the economic outlook was relatively poor following the global financial meltdown.
There has been a recent fall in price but, due to the ref. 16610LN’s status as an investment-grade timepiece, its recovery is likely to be faster than the Datejust’s.
Richard Mille’s RM11-03 dipped in value with the onset of COVID-19 in Summer 2020 but recovered later the same year. This model saw a similar drop at the beginning of 2022 but it has since recovered to achieve its highest ever value.
Richard Mille was one of the first brands to experience the dip now seen by the broader watch market and thus it has been one of the first watchmakers to recover: key information for those pondering whether to take advantage of the current decrease in the price of many models.
Looking at historical evidence, I predict the cost of living crisis’ impact on the watch market will be minimal and temporary.
The types of collectors buying luxury watches are typically not those hard hit by rising food and energy prices, so the impact of such economic factors on the luxury timepiece industry is unlikely to be significant.
However, these individuals will have money tied up in stocks, so any severe financial crash would lead to the selling of luxury assets and reduced purchasing power.
Which watches to invest in today
Stay away from commercialised brands that form part of watchmaking group conglomerates as these timepieces are not likely to perform as well during an economic downturn, compared to the big brands.
Anyone who is currently collecting for gain should start with the primary investment-grade watchmakers, not venturing away from them at this point in time.
Buy into Rolex, Audemars Piguet, Richard Mille, Patek Philippe and well-known independents like F. P. Journe which have waiting lists several years long that will remain, even during a recession.
Buy into trends but stay away from anything too niche.
Bright dial colours remain popular so this is a safe bet, but unique case shapes will seem dated in years to come.
If you know you want to hold onto the watch for longer than three years, then buying now is the right option.
If you want to sell sooner, then wait to see if prices come down further. Simply put, time in the market beats timing the market.”
Danny Shahid’s flagship DWL shop is in Mayfair’s Burlington Arcade, the home of luxury boutiques. DWL has more than 15 years’ experience in sourcing rare and big name watches, some of which are subject to lengthy waiting lists elsewhere. Staff are often asked for their expert opinion by fellow jewellers and retailers. The luxury watch experts’ stock is constantly changing but they have immediate access to more than one hundred exquisite models, most worth between £10,000 and £40,000 but some with a value of up to £500,000.
For more information about DWL, please visit www.diamondwatcheslondon.com and to find out more about Danny Shahid, follow @excellencebydanny on Instagram.
