Stocks, real estate, and cryptocurrencies aren’t the only assets that have soared despite COVID-19 lockdowns.
People lucky enough not to lose their livelihoods during the pandemic — and even see their wealth grow — are piling into collectibles like luxury watches, trading cards, and classic cars.
Like traditional assets, the luxury timepiece market took a hit amid the uncertainty of the early days of the pandemic.
Those who are still making money are bored out of their minds.Liam Cassidy, owner, Cassidy Watches
Liam Cassidy owns and operates Cassidy Watches. He sells luxury timepieces on the secondary market.
“I saw some panic sales for sure in the market and then very quickly, probably by mid-May pricing kind of rebounded,” Cassidy told Yahoo Finance Canada.
“From then till now it's really been on a tear in a continuous upward trend, pretty much every watch has risen in value.”
Cassidy says most of his clients are making more money than they were pre-pandemic, and have fewer places to spend it on like trips, expensive dinners, and nightclubs.
“Those who are still making money are bored out of their minds, and they're looking for new toys,” said Cassidy.
Rolex watches are particularly hot, in large part due to a lack of supply of popular models at authorized dealers, which has only been intensified by the pandemic. There are long waitlists and dealers aren’t selling to just anyone when they do have inventory. If you manage to snag one you can flip it for a profit on the secondary market.
For example, a steel Rolex Daytona with a panda dial retails for $15,500 but fetches a huge premium on the secondary market because it’s so hard to get at an authorized dealer. Cassidy said they were going for $28,000 in May 2020, but you can expect to pay just close to $50,000 for one today.
Vintage Daytonas like this one featured on Antiques Roadshow can fetch much more.
He says most Rolex sport watches are up around 20 to 30 per cent compared to last year. Besides Rolex, Cassidy says other brands that have gone up in value include Audemars Piguet and Patek Philippe because they are status symbols and pop culture icons.
“Whether it's in the rap world, or athletes, or other celebrities wearing them globally like a Korean K-pop celebrity or an American football player,” said Cassidy. “It's pop culture, you see the watches, and everybody wants them.”
He also says there's a herd mentality that gets people piling into popular models, which creates a vicious cycle of price increases.
Other brands that have seen big price increases include F.P. Journe and some models from Vacheron Constantin.
Cassidy says to expect to spend at least $5,000 for an investment piece as a bare minimum, but not all high-priced watches go up in value. He says Rolex rival Omega would drop around 10 per cent compared to retail, depending on the model. Others like Breguet and Frank Mueller take a big haircut on the secondary market.
Collectible car boom
The collectible car market has been booming over the past year. The median value is up 9.2 per cent year over year in the Hagerty Price Guide, one of the largest gains since the guide was launched. It’s the third largest year over year increase behind 10.2 per cent in 2006-2007 and 11.3 per cent in 2010-2011.
John Wiley, Hagerty’s valuation analytics manager says a migration out of cities for people whose incomes were unaffected could be a factor.
“Many enthusiasts saw added free time during the pandemic as the sign that it was finally time to make that purchase that they’d waited years, or decades, to make,” Wiley told Yahoo Finance Canada.
“Similarly, residential real estate has a very practical connection with collector cars: owning a residence makes it much easier to own a collector vehicle."
Hagerty says driving also currently happens to be one of the few safe ways to fulfil the desire to explore.
The hottest classic cars during the pandemic have been model year 1984-1991 Ferrari Testarossa, up 52.5 per cent year over year to $149,300. A Datsun 240Z from 1970-1973 is up 41.9 per cent to $54,000. A Mercedes-Benz 230SL from 1963-1967 is up 12.3 per cent to $68,700.
You can get your foot into the door of the collectible car market for a lot less though. A 1990-1998 Mazda Miata is $15,400, which is up 7.5 per cent compared to last year.
Saqib Saeed, market development manager at Hagerty says he recommends looking at cars you love.
"Look for the car you always wanted but never had. Look at the cars that were hot when you were young. Chances are some of them are now affordable and your peer group is looking at them again,” Saeed told Yahoo Finance Canada.
“That’s a good recipe for protecting one’s investment. But also remember to buy the best example you can afford and don’t be afraid if your dream car needs some work. You’ll want to budget 10 per cent of your purchase price for maintenance and upgrades.”
Check your basement for collectible cards
David Torchia just finished up his final semester at Ryerson University. He started a trading card business called Grail Pulls with his twin brother and it’s so lucrative that he’s doing it full time. He’s sold several types of cards including Pokemon cards, sports, NASCAR, and UFC.
Torchia says some high-demand cards have gone up thousands of per cent. He says sports icons fetch the biggest price tags. A Mickey Mantle Topps Gum rookie card sold for $5.2 million and an O-Pee-Chee Wayne Gretzky rookie card sold for $1.29 million.
Cards of modern-day sports stars like Zion Williamson are also a hot commodity.
“His rookie cards were crazy crazy in demand,” Torchia told Yahoo Finance Canada. “He proved that he could play elite in the NBA and so there was a crazy demand for 2019-2020 products and his cards in general.”
Grailpulls has one of Williamson’s rookie cards for sale for $40,000.
Oh my god, Pokemon Cards... I can't even make this up.David Torchia, founder, Grailpulls
Like Rolex watches, Torchia says there are shortages of cards at retailers so that’s helped elevate prices. But the best place to look for high-value cards might be your parents’ garage or basement.
“Oh my god, Pokemon cards," said Torchia.
“I have some friends who went into their childhood stashes in their basement and basically became millionaires. I can't even make this up.”
For example, Torchia says Charizard PSA 10 sells for $220,000 for the first edition.
Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.