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25 February 2008, 03:38 AM | #1 |
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Rolex an investment?
I'm a financial advisor "by trade" and am curious to know who thinks of their Rolex as an investment? By definition from wikipedia: Investment or investing[1] is a term with several closely-related meanings in business management, finance and economics, related to saving or deferring consumption. An asset is usually purchased, or equivalently a deposit is made in a bank, in hopes of getting a future return or interest from it.
If you apply the actual definition one could say that most Rolex's are indeed an asset that will produce a future return (appreciate in value). The key here is TIME. A 16710 for example if held for 20-30 yrs may very well produce a sizable return from the original amount paid. However, if a 16710 Rolex takes 25 yrs to double in value.....you avg'd a whopping 2.88%/yr return from this "investment". So, the argument can certainly be made that Rolex is indeed an investment. I would offer that it is generally not a good investment considering the same money put into a decent mutual fund would have made far better returns over 25 yrs than 2.88%/yr. There are of course exceptions with certain Rolex watches with new or hot models. I'm not telling you anything you didn't probably already know here, and most will probably reply with the same thing I would which is "I buy my watches to enjoy, if they happen to go up in value over time that is just a bonus." What I really wanted to know is if people are actually buying these watches in lieu of investing in other more traditional investments? Too much time on my hands today....
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25 February 2008, 03:48 AM | #2 |
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I bought my first Rolex in 1976 because of the hype. And later on I found out that these watches were a pretty good investment considering their super high resale value in the secondary market. Not only that, they were and still are very easy to sell.
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25 February 2008, 04:05 AM | #3 |
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Interesting question. As a normal course of events watches represent a less than ideal investment IMO.
Having said that, there are those viewing a select portfolio of vintage pieces as investment grade timepieces. It's hard to argue with the run up in certain vintage Rolex pieces (as well as certain other makes). 20, 30 50%and more per year ain't to shabby no matter what the commodity. Having said that one wonders what the investor/speculator does to the hobby in the long run. Many collectors have all but been closed out of many references that only a few years ago were easily within reach. Some have speculated about a "bubble", but as yet pricing remains rather strong with the move now seemingly toward "complete sets". As with anything geared toward financial gain, knowing when/what to buy and when to sit as well as having a well grounded knowledge of the subject is critical. |
25 February 2008, 04:15 AM | #4 | |
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25 February 2008, 04:27 AM | #5 | |
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Good response. I also believe at times when the stock market is weak (like now) and interest rates are poor, a small percentage of the total $$ out there finds alternate places to go. This momentum speculating becomes somewhat of a self fulfilling prophecy of money going in because its going up, which causes more money to go in, which causes it to go up, etc, etc. Bubbles always end with a burst. We can't be sure thats what we're seeing with vintage pieces, only time will tell.
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18 January 2023, 12:54 PM | #6 | |
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25 February 2008, 03:53 AM | #7 |
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i am trying to convince myself that purchasing a sea dweller before the price hike (march 1) is a good investment :-) my thought process goes something like this: if i can get 10% of now, and purchase from an AD where there is no sales tax, then I will be way ahead once the 10% across the board price hike goes into affect. since i live in CA that would mean my watch would go up in value ~ 28% in one week (less whatever depreciation the watch suffers when i purchase it). I can't quite convince myself this is a good idea...
feel free to talk me into it ;-) |
25 February 2008, 03:56 AM | #8 | |
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Go for it...
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25 February 2008, 04:00 AM | #9 |
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30 July 2008, 08:55 PM | #10 |
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30 July 2008, 10:00 PM | #11 |
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Don't forget, the value of your currency has a big impact on that "perceived value". In fact, last years price hikes for most watches brands in US had more to do with devaluation of USD to EUR than to apreciation of the watches.
If US currency gets stronger on the following years when compared to EUR, than its possible your "perceived value" in USD will get lower. |
26 February 2008, 09:47 AM | #12 | |
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26 February 2008, 09:59 AM | #13 | |
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Can you do the 10% layaway plan, pay the rest in 90 days?
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25 February 2008, 03:57 AM | #14 |
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I don't necessarily think of a Rolex as an investment. Rather, I look at it as a reallocation of assets. If you buy right you can break-even in the event that you need to sell...although it seems that I only sell to fund another purchase :)
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25 February 2008, 04:10 AM | #15 |
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They shouldn't be seen as investments, unless you are rationalizing a purchase. A Rolex is a luxury item. I know that I waited until I was financially stable before I started buying mine. Both of mine have increased in value, one doubled in value (it's been 18 years). Far less return than the DJIA or SPX. It's kind of like a zero-coupon bond. You buy it at a discounted amount, hang on to it for a long time and in the future hopefully it matures at full or higher value.
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25 February 2008, 04:05 AM | #16 |
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If you buy a nice Rolex, wear it for ten years and ...
sell it for a little more than you paid for it, How much does the entertainment value count? In my book it is a good investment in personal satisfaction. But a nice 356 drive it for ten years maintain it properly double your initial investment. Would a CD make more in 10 years? Probably Would a CD be a better investment? NOPE! |
25 February 2008, 04:10 AM | #17 |
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Well commented Mike.
Mrdi |
25 February 2008, 04:12 AM | #18 |
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The other benefit is that there is no capital gains tax. So that 2.8% become 4%. That is equal to ~5.5% return on a long term investment that requires paying capital gains.
At least I havnt paid capital gains taxes on my rollies. Oops, is the IRS reading this.....
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25 February 2008, 04:14 AM | #19 |
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If you buy from an ivestment point of view, then you are an idiot... Also ROLEX is not all that magical when it comes to resale value either. Just like anything, people will try to buy it for pennies ..... many people offered me $2500 or less for my D series BRAND NEW SD ,,,,,so I responded back with "how about a night with your sister for $2K?"...
so you will take a big hit on it once you buy it...so don't expect it to be like gold, where you get current market value no matter what ..... Once you buy it, you are stuck with it .... so buy carefully....very carefully......Buying is very very easy .... Selling is a million times harder ........ |
25 February 2008, 04:36 AM | #20 | |
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Sorry--that whole post is just irritating. |
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25 February 2008, 04:50 AM | #21 |
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I think there are only two current Rolex models that can be seen as true investment pieces: The SS Daytona and the Milgauss GV. You can sell those immediately after purchase for more than you paid.
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17 September 2009, 01:37 PM | #22 |
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25 February 2008, 04:56 AM | #23 |
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+1.
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25 February 2008, 05:01 AM | #24 |
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23 July 2008, 02:10 PM | #25 |
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I don't buy many things as an investment.
I buy nice things because I tend to like nice things. I did make a point not to buy a new Rolex because like a lot of stuff you take an initial hit buying it new. If I want to invest, I'll buy Krugerrands.
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30 August 2009, 07:36 AM | #26 |
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great watch-- stupid investment
The ease of resale is great. The market for used or new Rolexes is amazing and better than for any other watch. However, as a financial instrument it's pretty silly.
The "investment" value of Rolexes is something you tell your wife/husband to convince them that there is a perfectly good reason to own 4 watches. |
30 August 2009, 02:49 PM | #27 |
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A Rolex (or any watch, for that matter) is not an investment. An investment of any kind carries with it an expectation of profit. More often than not, you can usually recoup most, if not all, of the money you paid for a Rolex when you sell it, but that is generally due to the fact that they "hold their value" well, not because they have "appreciated" in value to any extent.
Of course, if you purchased a Rolex and it has become a collector piece over the years, then you MAY very well make a profit selling it. That is an exception to the rule, though. I enjoy my watches - I'm not concerned about them possibly making me a killing in the future.
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17 September 2009, 07:34 AM | #28 |
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Absolutely, a Rolex CAN be an investment if done correctly. Like some have said before, the initial price drop is direct from an AD purchase. With that in mind, buying a 2-10 yr old rolex would be a great investment since the price will generally level off or only go up from that point.
Lets say for instance a 2009 6K submariner will be worth 12K in 25 years. If you bought that same Sub for 4K in 2012, that would mean by the time that original 6K would double, your investment would have tripled. Personally, I don't buy any Rolex expecting it to go up. I believe that anything you can buy, use and enjoy for years and years, and then resale at the same price you bought it for is a good "investment" |
18 January 2023, 06:55 PM | #29 | |
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But indeed, I have very few people around me wearing Rolex, and all they talk about when it comes to Rolex is the money you can make. I allways say the same: buying is easy, but selling... If you buy a watch for 10 K from a gray dealer. And the next day you regret it, and you go back to sell it, if he likes you, be glad that you get 7-8K for it. So you lose immediatly when you buy it, to make up for that, you have to wait years and years. And then you even might get unlucky for some watch trends go out of fashion. -like plexi, younger people tend to go to saphire glass only because of the problems with water resistant for the older watches. -Bigger watches, maybe in 20 years or so, the SD 43 will be a bargain, because it's way too big then -...
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25 February 2008, 04:34 AM | #30 |
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Rolex is a luxury consumer good, and should be treated as such. You don't buy it to make money. And, you don't buy it unless you have the $$$.
However, even though we can afford the cash, there is still a bit of sticker shock over spending $5k-$10k (or more) on a watch. It is much easier to spend that $$$ knowing that you can get that money back in four or five years if you need it, or if you just decide that you don't really want the watch anymore. |
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