Despite Rolex And Patek Slip, Luxury Swiss Watches Still Outperform Stocks And Crypto

Despite the current decline in prices, the prices of Rolex, Patek Philippe, and Audemars Piguet watches, the most coveted timepieces in the world, have outperformed stock market returns and cryptocurrency returns, according to Trade Algo research. 

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Luxury watches' value dropped 8% last year, according to an index compiled by Trade Algo. Bitcoin plunged 65% over the last year as compared to a 19% decline in the stock market. 

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Over the past 18 months, almost all asset classes have declined, but the second-hand watch market has been relatively stable.

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Due to cash-flush consumers who were stuck at home during the recent pandemic and crypto investors seeking diversification of their gains, Swiss watch prices have fallen sharply on secondary markets as prices for the most sought-after Swiss watches have been soaring in 2021 and the first quarter of 2022.

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Watch dealers and individual investors alike have offloaded stocks of many models that were once hard to get in the past nine months as watch dealers and investors offload their stocks as timepieces become more scarce. Examples include the Rolex Daytona, Patek Nautilus, and AP Royal Oak.

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According to Trade Algo research, the number of Rolex watches on the secondary market surged by 19% in the fourth quarter alone, according to their estimate. It is estimated that around 104% of the watches produced by Rolex, Patek Philippe, and Audemars Piguet will be sold at their highest levels ever during 2022. 

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The fourth quarter was the most profound year-over-year price correction for the big three watch brands according to Trade Algo, with Audemars Piguet losing 6.8%, as well as Patek Philippe and Rolex each dropping 6.7%, mainly due to the selloff of their Daytona, GMT Master II, and Submariner watches. 

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A.Lange & Sohne, a German watchmaker owned by Richemont, which produces luxury timepieces in very small quantities but produces high-end watches in high numbers during the final quarter of the year, still saw a 1.7% rise in sales during the period. 

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There was a 13.3% rise in secondary market prices for TAG Heuer, an LVMH-owned mass-market brand, in the quarter as well as an increase of 3.2% for Tissot, owned by Swatch Group AG, another popular mass brand. 

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