THE STOCK MARKET TODAY
Every day we wake up to news of war in Europe, energy crises, shortages, rising costs, and inflation. Since that day in March 2020 when a global pandemic forced the shutdown of many countries, we have been operating in a world that requires more adaptability and vigilance than ever before. We have gotten used to the fact that we truly do not know what will happen on any given day until the sun goes down.
Our spending has changed. Our worldview has changed. Faith in large institutions such as the Parliament, banks, the press, and large multinational corporations has declined, and this is reflected in everything from stock trading, investments, opinion polls, and, not least, opinions about our elected politicians.
For the average person, it can be difficult to predict the development of the stock and housing markets in a time of multiplying electricity and heating prices. It is hard to understand whether it makes financial sense to tie up a large part of your savings in a holiday home when only 60% of the purchase price can be financed, meaning that you must deposit 40% of your savings in a holiday home that might decrease in value at the same rate as electricity and heating prices rise to the astronomical heights we are currently witnessing.
INVESTING IN LUXURY WATCHES
In the market for investment watches, we have seen several corrections during the spring. A market that has distinguished itself by rising consistently over the past several years, with no dips or notable fluctuations.
Such a correction can create speculation of impending crashes and bursting Rolex bubbles. Understandably, there are a lot of responses when a stable market suddenly starts to move unexpectedly.
But even though some Rolex models, among others, showed losses of up to 30% during the late spring of this year, we must remember that these are losses on top of a huge growth in value over several years. Thus, we saw that models that lost the remaining 30% ended up at prices like where they were in the third quarter of 2021. A decrease, yes. A drastic decrease, no.
THE PROPER INVESTMENT
Let us get back to the real estate market. When we look at the development of house prices over the past 50 years, we see that despite ups and downs – even big ups and downs – real estate is still a highly profitable business.
It is still true that there is a lot of safety in investing in bricks. But in uncertain times with financial market instability and rising energy prices, tying up 20-40% free liquidity in an investment as large as a house, holiday home or rental property can be a major risk.
Furthermore, the instability and rising prices of electricity and heating will complicate the ability to quickly sell properties in a situation where it is important to free up capital in the short term.
Back to the investment watch market. When we look at the price development in the investment watch market over the past several years, we see a rising price development curve, just like in the real estate market. On watches, the curve is just steeper.
LUXURY WATCH INVESTMENT ADVICE
Part of the reason we are seeing an increasing influx of investment clients is that they see an opportunity to invest heavily in a portfolio with assets that are easily liquidated and have a high percentage increase over a relatively quick timeframe.
In the real estate market, it is not possible to sell off the annex first and then sell the garage, living room, and first floor in small chunks if you suddenly find yourself in a situation where you need more liquidity.
But a portfolio of attractive investment watches allows you to increase and decrease the amount of capital tied up as your own need for liquidity rises or falls. That is what our investment clients see. And that is driving a rising interest in creating a heavy portfolio of investment watches. We are more than happy to help you put together a portfolio that ensures a high turnover rate, a healthy mix between category and price, and a product that is so much more than just numbers on a screen.