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Rolex as Investment

6K views 27 replies 25 participants last post by  bmdaia 
#1 ·
First off, I don't think buying Rolexes or most any watches (save maybe really unique/historical models) are "good" investments. I'm sure a basic Vanguard index fund would far out perform the value of a Rolex over time. But, my question gets more to whether buying a Rolex is better investment than simply keeping cash in the bank? Right now you'd be lucky to get one percent interest on most bank accounts, and much likely a lot lower. Would most Rolexes gain at least one percent in value a year over time?

To be even more specific, if I bought a $5,000 vintage Submariner today and also put $5,000 in the bank, which would be worth more in 10 years?
 
#4 ·
First off, I don't think buying Rolexes or most any watches (save maybe really unique/historical models) are "good" investments. I'm sure a basic Vanguard index fund would far out perform the value of a Rolex over time. But, my question gets more to whether buying a Rolex is better investment than simply keeping cash in the bank? Right now you'd be lucky to get one percent interest on most bank accounts, and much likely a lot lower. Would most Rolexes gain at least one percent in value a year over time?
No. Rolex may gain value over time, but it is not liquid. If you need the cash now for an emergency, bank account is better. Even a money market fund would more liquid than trying to put up a rolex and sell it. watches are not investments. You can't eat them. You can buy groceries or pay bills with them. You can't put your kids through college with them. They are not CDIC or FDIC insured.
 
#7 ·
First off, I don't think buying Rolexes or most any watches (save maybe really unique/historical models) are "good" investments. I'm sure a basic Vanguard index fund would far out perform the value of a Rolex over time. But, my question gets more to whether buying a Rolex is better investment than simply keeping cash in the bank? Right now you'd be lucky to get one percent interest on most bank accounts, and much likely a lot lower. Would most Rolexes gain at least one percent in value a year over time?

To be even more specific, if I bought a $5,000 vintage Submariner today and also put $5,000 in the bank, which would be worth more in 10 years?
In one hand you claim to know about the vanguard fund and in the other you say "keep cash on hand"?????????

Who the hell keeps idle cash?

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#8 ·
Impossible to predict. A Rolex should appreciate in value over time, but the Vanguard Fund will probably do better. If I was a betting man, I would buy the watch to wear and the fund to invest.
 
#10 ·
Rolex watches are luxury goods (e.g. consumer discretionary items). If the economy is growing, their values will increase, if the economy is in a recession, the prices drop very quickly. In 2007-2009, during the peak of the economic recession, I saw pre-owned 16610LV's (green bezel Subs) selling at "fire sale" prices, around 3.7K-4.2K USD. Owners needed to sell them to raise $$$ for other necessities. A lot depends on when you buy or sell, as with anything you would buy for potential appreciation.
 
#11 ·
It's always amusing to see people try to justify a Rolex purchase as a smart investment or similar, but the reality it is just a luxury watch and there are dozens of ways to actually invest money that are a lot more sensible.

The problem is that if you buy an amazing example and then hold onto it for ten years, who knows what the market will look like then. Are you just arbitrarily going to sell it in ten years? Or only if you need to? And if you need to, are you going to be forced to fast sell it for less money than it is worth? Do you have a good means to sell it, like a great reputation on eBay? Or will you have to wholesale it to a dealer, who is going to want to buy it for a price where they can resell it for a profit?

Then there are hidden costs like perhaps paying sales tax when it was new. How about servicing, you are probably going to have to eat the cost of servicing it at least once in ten years. And what about insurance? Are you just going to lock it in a safe and never wear it? Or risk wearing it and hope it never gets damaged or stolen in the next ten years? Will you accidentally damage it in minor ways that will reduce the value?

I'd say that for the vast majority of people, you are looking at breaking even at best. So unless you find a crazy good buy, hold on to it, sell it at the right time, and have the ability to easily sell such an item, then you won't be walking away from the experience feeling like you 'invested' smartly.

Even if you buy a less common piece like the Sub LV, GMT BLNR, ceramic Daytona, then there is no way of knowing if Rolex will still have a stranglehold on the price, supply and demand for that specific piece in ten years. Many watches that are hot right now, won't be hot forever. If Rolex release say a Coke GMT in steel, will that ding excitement for the BLNR?

I think that a Rolex is best purchased to enjoy and wear. If you can get most of your money back out of it when you sell it, then you did great, and got to enjoy a great watch for a while at little cost to you.
 
#12 · (Edited)
Watches are useless investments unless you actually want to sell them and I've never bought Rolex with that intention and never sold. I've bought because I wanted to enjoy them over 20-30 years!
Buy what you actually enjoy and who knows, one day you may be lucky however always buy 2 of everything if you are looking for investment potential.
 
#13 ·
it may perform better under many assumptions - economy improves, you can actually sell it, you don't lose it or have it stolen... that said I'd say the increase you'd have in value over your idle checking account is not worth the 'risk' of either losing value or trying to recoup a marginal 'profit'
 
#14 ·
I never buy with the intention of it being an investment. That said, I typically don't hold on to watches long, so Rolex is good for me. Unless you buy poorly, you aren't going to lose your tail. If you come out on the positive end, consider it a win and be happy.
 
#16 ·
I am considering buying a Rolex as my next purchase as an investment, but only in the context of my watch collection. I mostly/exclusively have obscure brands (my Blancpain Fifty Fathoms Bathyscaphe being the most well known watch of any significant value), so a Rolex would rebalance my "portfolio" a little. You know, in case something crazy happens like the general public losing interest in mechanical wristwatches...
 
#19 ·
I love these threads.

Personally if you are going to park some funds, look at a ladder CD. Or money market account. Or even t-bills. Maybe even some highly rated bonds. Much less risk, better return than leaving it sit. Much more predictable growth for your sitting money than the future of a watch market.

One should never liken a luxury item to an investment. There are so many rolexs made and will continue being made. Are you going to put it in a safe and never wear it? If so, see my first suggestion. What makes you think it will become rare enough to increase in value (basic supply and demand premise). Most importantly, past performance is not indicative of future performance.

Do yourself a favor and google swiss watch sales statistics, they have been in rapid decline in recent years. There is no reason to think this will change for the better. Take a look at the rapidly changing landscape (hello smart watches), it's not looking any better for analog watches. Buy watches to enjoy not to invest.


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#20 ·
This is like the people who obsess over resale value on a car. If you are concerned about what something will be worth after you've grown tired of it, then you should really evaluate whether you are truly in a position to afford the purchase in the first place.
 
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#21 ·
Like others have said-- watches are terrible investments as pure investments. That being said, the advantage of Rolex is that it does seem to hold its value more than most brands, so if I did decide to sell I'm not too worried about getting most of what I paid for it back (I bought used), and any money I lose is a modest 'rental fee'. If I make money when I sell, then that is just an unexpected bonus. So I look at it as a relatively illiquid asset that shouldn't depreciate too much if the past market is any indication of anything.

Now if you are a collector who understand the market and knows how to spot bargains and rare finds, that's a different story.
 
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