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Watch Investments

With shares sinking, now could be the moment to invest in a timeless Rolex

They were a must-have accessory for movie stars and the man on the moon; now a market has grown for trendy timepieces

By Carol Lewis

 

Steve McQueen and Paul Newman favoured Rolex, Neil Armstrong wore an Omega on the moon, James Bond originally wore a Rolex but in recent years has swapped to Omega.
The two watch brands hark back to a time when men were action heros conquering the universe by day and sipping cocktails with beautiful women at night. Now modern masters of the universe are trying to recapture those heady days by buying the watches.
Luxury watches are undoubtedly seen as status symbols but really savvy enthusiasts will buy pre-owned or vintage models dating from the Sixties and Seventies.
Matt Bowling, sales director at watchfinders.co.uk, says: “We've found over the past two years that people are shifting away from buying new watches into the pre-owned market for a number of reasons — they look like new, depreciate very slowly and cost less in the first place.
“If you are buying a watch as an investment, then Rolex is the brand to go for and within that brand [choose] the larger-sized sports watches like the Submariner Date, the Sea Dweller or GMT-Master. These are the watches that there is highest demand for and hold their value best.
“Another factor that makes pre-owned watches good buys is that retailers are constantly increasing the price. Twice in the past year Rolex have put prices up and they are due to do it again [in the UK] on February 1, which is great news for people who have pre-owned watches - as the retail price rises, so the value of the watch does.”
The price fluctuations and slow depreciation have helped Joel Reid, a security consultant, to make money from his hobby of buying and selling pre-owned watches. Mr Reid made £1,500 profit from selling a Rolex Daytona, then buying it back and selling it again. “It is money for doing nothing”, he says. The most he has ever paid for a watch is just under £5,000 for a Daytona. The biggest profit in one transaction has been £1,000 and the lowest, £250.
Some people achieve considerably higher returns. Paul Maudsley, director of watches at Bonhams, the auction house, says that his last watch sale in December “was a very very strong sale”.
He says: “It is all to do with the major brands and the top of the tree is Rolex and Patek Philippe. If you are looking at the world's most collected brand and with the most [internet] forums behind it, and the one I get most calls for, it is the Rolex.
“The key dates are 1960s sports watches — Rolex Submariner, GMT-Master and chronographs — this market is very much fuelled by guys with a passion for cars and watches. They are absolutely a good investment. A Rolex GMT-Master from 1960 would have cost £4,000 18months ago. This December, we had one go for £9,500, which is quite good in my book.”
At the December sale, a 1974 Comex diver's watch fetched £72,000. However, it was not an everyday model. It came with documentation, a diver's log book and photographs. “That took it from a £4,000 to £5,000 Comex up to a £60,000 to £70,000 watch,” Mr Maudsley says. But, as this example shows, the vintage market calls for specialist knowledge.
James Dowling, editor of timezone.com, a watch forum, sounds a warning note: “The vintage market has seen some catastrophic falls in the past three years. There has been a real flight to quality with only the very, very best - such as the early, complicated Patek Philippe watches — holding their own. Even some of the vintage Rolex sports watches are not making what they would have once.
“Right now, perhaps people would be better with pre-owned, but people shouldn't buy based on whether the value will go up or down. They should buy a watch that sings to them, one that they love.”
Modern watches are still mimicking the classic sports timepieces of McQueen and Newman's day. At a recent watch show in Geneva, manufacturers unveiled some chunky sports models — including a 60mm Panerai. “It is the size of a small alarm clock,” Mr Dowling says. However, the development cycle of a new watch is slow.
Christopher Ward, founder of the British watch manufacturer that bears his name, says: “We think that with the financial climate as it is the size of watches will start to come down as people will no longer want to be seen as quite as overt and showy.” The company, which recorded a rise in sales of 150 per cent last year, says that men's sports watches, in particular aviation-style models with a vintage feel are very popular. “Mechnical watches are a huge trend. I think it is a masculine thing which goes back to before cars became perfect and men could bury their head under the bonnet and tinker,” he says.
And, presumably, when they had time on their hands to do so.
Case study: Ashil Vaghela
Ashil Vaghela's passion for watches began when he received an Omega Seamaster for his 18th birthday. A couple of years later he bought his first luxury watch - a second hand Panerai for £1,500.
At 26, the telecoms director is hooked on collecting watches, but where he once had 16, he now keeps it down to about five.
“The most I've ever paid for a watch is about £9,000 for a Patek Philippe Nautilus and I still have that one. It is an iconic model.
“I don't do this to make money, this is just a hobby. Profit-wise I've never made more than a couple of thousand pounds profit on a watch and that was for a vintage Rolex.
“If I was to buy a watch with minimal risk of depreciation I would stick to Panerai, Audemars Piguet and Rolex of course because they remain the most popular and the easiest to sell.”
Mr Vaghela is also on the waiting list for Jaeger LeCoultre's new Polaris but he is most excited about this year's launch of De Grisogono's mechanical digital watch the Meccanico DG, although at £220,000 it is somewhat pricey.
The top 5 preowned watches
By Matt Bowling at watchfinder.co.uk
Rolex Submariner Date
Price new £3,470 Price at 2 years old £2,900
The benchmark against which all other watches are compared. A classic design, largely the same as it was when it was introduced by Rolex back in 1954.
Rolex GMT Master II
Price new £4,050 Price at 2 years old £3,200
Originally designed for Pan American airline pilots, this watch has enjoyed a resurgence lately. The high price of the recently revised model has made older models more valuable.
Omega Seamaster Co-Axial
Price new £1,860 Price at 2 years old £1,250
A great watch for someone looking to test the prestige watch market. Reliable, hard wearing, and stylish – very James Bond. A model which has recently appreciated.
Rolex SeaDweller
Price new £3,280 Price at 2 years old £3,400
Designed and first produced in the 1960s for ocean floor workers, this watch is rarely taken to its limits. It is a hugely popular model that bears a striking resemblance to the original watch.
Omega Seamaster Planet Ocean
Price new £2,150 Price at 2 years old £1,300
A hard-wearing dive watch that is very popular and well worth consideration by anyone looking to get into the luxury watch market.

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