Using Rolex as Investments --- Why not?

[samgobigs]

I've heard many posts along the lines 'don't use Rolex as investment' but let me play the devil's advocate and ask why not? Why is this a bad idea?

For example, if you really believe a particular model, say a Daytona as an example, will increase in value over the next decade or so, and if you have the funds, why not buy this watch and store it in a safe, for the sole purpose of investment?

I buy stocks in companies I never buy a product from, and real estate in places I would don't live in, so I'm ok with the idea of buying a watch and not using it.

Also, since there's no way or investing in Rolex as a company (it's privately owned), investing in their timepieces would be the closest way.

There's also minimal cost in terms or maintenance or servicing if I just leave the watch in a safety deposit box. There's no roof to repair and annoying tenant to deal with unlike owning a piece of real estate.

Their watches are almost guaranteed to increase in value each year due to their predicted annual piece increase, so this also works in favour of investments. And as brand with expert knowledge in marketing and supply and demand, there's a good chance that their models would always be in demand many years from now.

I have plenty of investments elsewhere and thought this would be a nice way of diversifying away from other investment options.

[MikeMWatchFan]

I think of them as investments that I can enjoy using. Lower beta vs a lot of my other investments, but that’s ok.. I’ll trade off stable appreciation that slightly beats inflation for the fact that I can actually enjoy them unlike an equity holding.

[blue lion]

Agreed with both posts above
Both of my watches were bought used and in theory based on an appraisal recently, and what they are selling for, have doubled in price
So not bought as investments but they are truly that

[Aussiexplorer]

I look at it this way, I am not a rich man, but enjoy quality items. I bought a Explorer 2 16570 five years ago for AU$6K. On the weekend, the same retailer was displaying a very similar piece for $12K. If I had bought an Omega timepiece, which I would probably have enjoyed just as much, I would not see such an appreciation in value. I love my Rolex and I know I can wear it for free, because if I ever need to sell it I will enjoy a great financial return and not a loss. To me Rolex is a safe way to enjoy great watches.

[UK_]

As investments go, I think there are better options (ETFs etc).

But generally a Rolex will hold its value over the long term, which is great.

And is also why Rolex will never want to go back to the days of supply greater than demand.

A lot of these ‘profits’ are in paper, selling a watch is a lot of haste.


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[upsidedownbelt]

Certain people on this forum take offense to dealing with Rolex watches as investments because it takes something that they have spent years enjoying, studying, thinking about, bonding with, and a brand they respect and reduces it down to dollars and cents. Gambling. They find it foolish and disrespectful. I myself think it adds a fun aspect to the collecting and enjoyment of the watches.

[Bryan81]

A lot of people around here have pretty visceral reactions to people mentioning Rolex watches as investments. I think it’s because the more people buy Rolexes to have sit in a safe as investment, then the harder it is for enthusiasts to find the watches they want at an AD (or discounted below MSRP).

I don’t buy watches as investments, but if others do I could care less. Sorry if you can’t walk into an AD and buy your grail at a discount. That’s just the way markets work. If people don’t like what Rolex has become, they can find another hobby, probably one that doesn’t involve luxury goods.


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[rmlovett1]

I think this discussion (IMO) comes down to what your own personal definition is of an “investment” is.
When I put away $$$ for investment....lt won’t be in watches, because my personal definition of an investment, would have bigger expectations and returns.
I buy watches to enjoy.....the piece of mind knowing Rolex won’t tank in value....just icing on the cake. YMMV

[Deroya]

Because it destroyed the market... and possibly the reason things are the way they are now.

[BigAppleBill]

Sure. Why not a Rolex-backed crypto currency? Oystercoin?

[drfrankenstein]

Don’t believe in it but don’t have a problem with it. The problem is the one-sided arbitrage of hot models from ADs that are flipped to dealers. Let’s also face facts, there are plenty of young people who have no business buying an Explorer which they put on a credit card calling it and investment when they don’t even have an IRA.

[ronricks]

Originally Posted by Richris1

I think this discussion (IMO) comes down to what your own personal definition is of an “investment” is.
When I put away $$$ for investment....lt won’t be in watches, because my personal definition of an investment, would have bigger expectations and returns.
I buy watches to enjoy.....the piece of mind knowing Rolex won’t tank in value....just icing on the cake. YMMV

This. I buy watches to enjoy them and Rolex holding value is just an extra perk.

[rolexdream]

10k today in a index fund would give you a much better return than a rolex, plus you dont have the stress of selling it

[Singslinger]

I think a Rolex model like the Daytona today would make a good investment if you buy say, 10-20 pieces.

Assuming you might make a return of say 50% over 10 years, then the absolute amount made is meaningful.

To me, making 50% in say 10 years (or even 5 years) on one watch that cost around US$13,000 is good but not really that great an investment because the absolute profit isn't that big. You'd need the price to rise at least 5 times for me to be interested but how realistic is this?

Speaking being realistic, no one is going to buy that many pieces of the same model in the hope that the price will appreciate.

Ergo, for me - just buy, wear and enjoy and forget about it being an investment. If the price rises then well and good but I ain't gonna be able to retire on the profit (if I sell).

[gleiden]

If I wanted to make money, I wouldn't choose watches as that vehicle.

The fact that all the watches I bought at MSRP have gone up in value is a pleasant side-effect, but not the objective.

[dnd2984]

you can but better vehicles out there for a 10 year timeline, rule of 72....

[GT3 Mike]

Watches as an investment, especially a mass produced timepiece like Rolex is a bad idea. If you want to invest in horology, look at Pateks.

Honestly, I hope the Rolex market tanks and my watches become worthless. I didn't buy Rolex for value retention or profits and like others have said, the fake hype, FOMO market has absolutely destroyed the hobby.

[Fleetlord]

Honestly the topic is irritating to the WIS, who are also professional and advanced amateur investors, that populate watch forums as the dollar amounts and subsequent returns are relatively insignificant, so it’s not worth bothering with...and becomes an annoyance as it makes obtaining watches harder..etc.

However, the monied general public sees things differently. Watches are a bargain compared to art and collector cars..etc. Since cash is trash and what else are they going to do with their money? Watches keep going up to the moon! Just buy them..

[csaltphoto]

Originally Posted by rolexdream

10k today in a index fund would give you a much better return than a rolex, plus you dont have the stress of selling it

Actually not. According to C24 I'm up 65% in two years on my sub. I didn't buy it for an investment. I hadn't worn any watch in 10 years and wanted something nice. One of the reasons I picked Rolex is that if I decided I didn't want it I was unlikely to lose money... I certainly didn't expect this kind of appreciation though.

[Eyenigma]

Anything can be an investment if:

1. You're actually willing to sell it.
2. And you can find someone who will pay more for said asset in the future, than you did.

Profit is only realized, when you sell it. Doesn't matter how much you were up at the Casino. How much did you LEAVE with? Same applies to watches. Think of all the Panerai investors who WERE up big on their safe full of pieces? Not suggesting Rolex is in the same league of Panerai. But goes without saying every brand has their moment that waxes and wanes.

[Pw92676]

Originally Posted by csaltphoto

Actually not. According to C24 I'm up 65% in two years on my sub. I didn't buy it for an investment. I hadn't worn any watch in 10 years and wanted something nice. One of the reasons I picked Rolex is that if I decided I didn't want it I was unlikely to lose money... I certainly didn't expect this kind of appreciation though.

You are not up (or down) any percent until you sell it. But when you sell it you are down a great watch.

[Robert Bruce]

Remember the tulip crash of 1637.

[EEpro]

Originally Posted by Pw92676

You are not up (or down) any percent until you sell it. But when you sell it you are down a great watch.

Bravo

[Gab27]

It's not how I choose to invest my money (nor would I want to deal with the stress and risk of selling watches or the potential financial consequences of [another] crash), but more power to you if it is your thing. Did such use of watches as investments contribute to the amount I ultimately had to pay for my Sub? Maybe, but that's how things work. Even if the market does crash, I'm still going to enjoy my Sub!

[poliwog]

Originally Posted by Eyenigma

Anything can be an investment if:

1. You're actually willing to sell it.
2. And you can find someone who will pay more for said asset in the future, than you did.

Profit is only realized, when you sell it. Doesn't matter how much you were up at the Casino. How much did you LEAVE with? Same applies to watches. Think of all the Panerai investors who WERE up big on their safe full of pieces? Not suggesting Rolex is in the same league of Panerai. But goes without saying every brand has their moment that waxes and wanes.

I like the casino anology.

Profit on your watch or whatever else is only realised when you let go of it.

[JR16]

Originally Posted by Fleetlord

Honestly the topic is irritating to the WIS, who are also professional and advanced amateur investors, that populate watch forums as the dollar amounts and subsequent returns are relatively insignificant, so it’s not worth bothering with...and becomes an annoyance as it makes obtaining watches harder..etc.

However, the monied general public sees things differently. Watches are a bargain compared to art and collector cars..etc. Since cash is trash and what else are they going to do with their money? Watches keep going up to the moon! Just buy them..

“To the moon!.”...


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[csaltphoto]

Originally Posted by Pw92676

You are not up (or down) any percent until you sell it. But when you sell it you are down a great watch.

Well yeah! Never going to sell it. But if I had bought 100...

[grimps]

It's nice to be able to own something that increases in value that you can wear and enjoy everyday.
I own 16 Rolex and a few other watches that I have all been bought by myself over the last 11 years.
They're just watches to me with no sentimental value so If I ever need the money I'd have no problems selling them, if I don't ever need the money then some of my family can sell them when I finally fall off my perch

[Kevin of Larchmont]

As the child of depression era parents I carry the lessons of the boom and bust cycles they endured throughout their lives. As a child I didn’t always get to eat or wear what I wanted but I never wanted for either. In my own adult life I have learned that circumstances can be uncertain and all my life I have tended to consider an exit strategy whenever I make a major purchase. While not an investment per se Rolex provides me with a stable and viable exit strategy. I don’t believe I’ll ever need it but it’s hard to shake those lessons learned, even the ones that are inherited.

[jimcarver]

I personally think it just takes the fun out of the hobby.

With hindsight many things are a good investment, I bought a 116710 in early 2015, its now worth considerably more....did I know that when I bought it? No. Would I see the same sort of increase if I were to buy now? Also no. (well its discontinued but take a Sub as a similar comparison).

For me it just creates that cycle where watches are so hard to get because people "are buying a watch to pass down to my son" and that kind of thing, without actually knowing if their son will like watches. Buy a watch if you want a watch, don't if you don't. It's a simple as that for me.