'Rich people are bored': How to double your money with luxury watches

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 from brands like Rolex, 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.

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.

Jessy Bains is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jessysbains.

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