Achieve a Balanced Portfolio: Money Man Jimmy Cosmo Explains How

Money managers often talk about balancing portfolios. I collect watches with a similar logic: once aesthetics and romance are put to one side, the money has to work and with hedge funds taking a closer eye on physical assets and continued record-breaking prices emerging for vintage watches, now is a smart time to turn that hobby into a pension.

Patek Philippe is blue chip; it’s an inflation hedge and if you invest in the classics (by which I mean the Philippe Stern watches) it has a steady yield. Watches such as Ref. 5970, 5070 and 5004 I suspect will continue to deliver that four to five per cent a year return when purchased in good condition with original box and certificate.

Supply of such pieces is already tight and if you fancy yourself as the next George Soros with Paul Tudor Jones pockets, then pieces such as Ref. 5004 (in stainless steel) or Ref. 5074 are an exciting long-term acquisition. For those adrenalin junkies who gorge themselves on risk and sleepless nights, Paul Newman Daytona is perhaps the ultimate investment. It’s the hardest watch to appraise given the numerous theories on its dials and references, and within it lies what I believe is the biggest potential for growth in the market in watches, especially those with rare yellow gold. Paul Newman’s watch and a vintage Rolex are each unique assets in their own right. So where is the middle ground, the watch equivalent of a stock with decent dividend and long-term growth?

The Rolex Daytona Ref. 6263/6265 could be just the answer. In a similar vein is the Patek Philippe Ref. 5070. Both watches exist at a price point that is within the relative realms of affordability; though they have both been discontinued, they are recognized as two of the most desirable watches from perhaps the two most coveted brands.

With Ref. 5070 we find Patek’s largest case to date (42 mm) in all metals and inspired by the incredibly rare Ref. 2512 aviator’s split-second chronograph of the 1950s. With its manual-winding lemania based 27-70 movement, it’s recognized globally as the iconic modern Patek Chronograph. Quite simply, the purity of its design has not been topped. The presence of the Patek archive also adds the reassurance that the watch you are buying has not been plagiarised with dial changes that afflict many vintage Rolex watches.

Ref. 6263/6265 have recently benefited from a number of important factors. The hugely successful Lesson One sale has defined the Daytona as the vintage Rolex for investment and the kudos of many high profile owners from the world of fashion and screen has added to their desirability and global appeal. Here is a watch that is a brand within a brand, characterized by a beautiful dial within a rugged and useable case. Finding good watches is however becoming increasingly difficult (especially for the Ref. 6263) and prices for such pieces are gravitating higher as supply from traditional markets such as Italy diminishes. As the price of Paul Newman pieces continues to rise ever closer to $150,000, the regular or “non-exotic” dial Ref. 6263/6265 at $60,000 loses real value. Consider that one Paul Newman Ref. 6263/6239 RCO famously fetched a magic $1 million, and that value looks even more appealing. Here is a great watch that defines what the Daytona stands for, fitted with a superb Valjoux calibre and the ability to provide good growth on your investments.

A portfolio needs a balance and betting consistently on the underdog is a challenging ride. These two timepieces from two great manufacturers provide the ideal ba-lance between risk and reward.

Jimmy Cosmo is a thirty-something money manager. He’s collected cars and watches (both vintage and modern) for more than 15 years. He started collecting limited-edition watches from the age of 8 and his passion grew with his appreciation for great brands such as Rolex and Patek Philippe. Follow Jimmy Cosmo on Instagram at @jimmycosmo.