With crypto freefalling, stocks going into the red, inflation (and frustration) on the rise, one could say that we have entered a bear market. I thought the pandemic would have put us there already, but it did more of the opposite. When the cases of Covid-19 first spiked and we entered a lockdown, I remember thinking that nobody would care about watches. It turned out that with everybody at home, interest in this topic was on the rise. As most could also work from home, the income of a significant number of people didn’t decline, while the disposable part of it rose as many costs were cut as travel was restricted.
So after a slight dip, mainly caused by the manufactures forced to be closed during the lockdown, watchmaking went stellar. New products couldn’t be produced fast enough and were one of the reasons that the pre-owned and vintage market exploded. That is a part I didn’t in particular enjoy, as it is nice to see things maintain or gain their value, but in quite a few cases, the increase was so enormous that some models have become virtually impossible for an increasing group of collectors to afford. Another downside is that when watches gain so much in value is that they are worn less and less, as it makes people more conscious.
So what will be the effect of the bear market? Typically, this would lower demand, allowing the market to cool off, but is this still typical? Many of the ‘laws’ of economics have already gone out of the window, as the pandemic made expected effects not happen or even work the other way around. The bear market might also have this effect on watches, as many might still think that they are a wise investment, giving them almost the same status as gold. The question is also if a recession is going to happen. That will also affect the watch market one way or another, but in which direction, I don’t even dare to guess, but as always time will tell.
What effects do you think the larger market might have on the watch industry? Let us know in the comments below!