The Rolex Forums   The Rolex Watch


ROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEX

Old 25 February 2008, 03:38 AM   #1
bgriz
2014 La Royale Pledge Member
 
bgriz's Avatar
 
Join Date: Nov 2007
Real Name: Brian
Location: Chicagoland
Watch: ing the markets
Posts: 2,031
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....
__________________
116610 SubC
16710 GMT II PePsi
216570 Exp II 42
116520 Daytona
1680 Red Sub mkV
Hers- 178274 midsize DJ Rhodium/Roman
Omega Speedmaster Apollo 11 35th Anniversary LE Panda 3569.31.00
bgriz is online now   Reply With Quote
Old 25 February 2008, 03:48 AM   #2
mldaytona
"TRF" Member
 
mldaytona's Avatar
 
Join Date: Feb 2008
Real Name: Michael
Location: USA
Watch: me go all out
Posts: 1,184
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.
mldaytona is offline   Reply With Quote
Old 25 February 2008, 03:53 AM   #3
mborkow
2014 Pledge Member
 
Join Date: Oct 2007
Location: san francisco
Watch: gmt2c pam372
Posts: 830
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 ;-)
mborkow is offline   Reply With Quote
Old 25 February 2008, 03:56 AM   #4
bgriz
2014 La Royale Pledge Member
 
bgriz's Avatar
 
Join Date: Nov 2007
Real Name: Brian
Location: Chicagoland
Watch: ing the markets
Posts: 2,031
Quote:
Originally Posted by mborkow View Post
i am trying to convince myself that purchasing a sea dweller before the price hike (march 1) is a good investment :-)

feel free to talk me into it ;-)

Go for it...
__________________
116610 SubC
16710 GMT II PePsi
216570 Exp II 42
116520 Daytona
1680 Red Sub mkV
Hers- 178274 midsize DJ Rhodium/Roman
Omega Speedmaster Apollo 11 35th Anniversary LE Panda 3569.31.00
bgriz is online now   Reply With Quote
Old 25 February 2008, 03:57 AM   #5
CL65AMG
2014 Bond007 Pledge Member
 
CL65AMG's Avatar
 
Join Date: Jan 2008
Real Name: Andrew
Location: Kentucky
Watch: Any Rolex
Posts: 1,076
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 :)
CL65AMG is offline   Reply With Quote
Old 25 February 2008, 04:00 AM   #6
mdx77
"TRF" Member
 
mdx77's Avatar
 
Join Date: Jan 2008
Real Name: Kurt
Location: Philly Burbs!!
Watch: 16610LV
Posts: 2,946
Quote:
Originally Posted by bgriz View Post
Go for it...
x2!
__________________

"But, when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security."

Declaration of Independence
July 4, 1776
________________________________________________
Omega Seamaster
Breitling Super Avenger
Rolex Oyster Perpetual Date Submariner 50th Anniversary
mdx77 is offline   Reply With Quote
Old 25 February 2008, 04:05 AM   #7
Mrdi
"TRF" Member
 
Mrdi's Avatar
 
Join Date: Mar 2006
Location: Surf City, CA
Posts: 3,490
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!
Mrdi is offline   Reply With Quote
Old 25 February 2008, 04:05 AM   #8
mike
Moderator & 2014 La Royale Patron
 
mike's Avatar
 
Join Date: Jul 2005
Posts: 21,475
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.
mike is offline   Reply With Quote
Old 25 February 2008, 04:10 AM   #9
GoldenBear
"TRF" Member
 
GoldenBear's Avatar
 
Join Date: Jun 2007
Location: San Francisco
Watch: Submariner
Posts: 2,481
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.
__________________
____________________________________________
Rolex Blue TT Submariner
Rolex SS Submariner
Breitling Emergency Mission

**They are just watches, wear 'em.**
____________________________________________
GoldenBear is offline   Reply With Quote
Old 25 February 2008, 04:10 AM   #10
Mrdi
"TRF" Member
 
Mrdi's Avatar
 
Join Date: Mar 2006
Location: Surf City, CA
Posts: 3,490
Well commented Mike.

Mrdi
Mrdi is offline   Reply With Quote
Old 25 February 2008, 04:12 AM   #11
CPCC
"TRF" Member
 
CPCC's Avatar
 
Join Date: Dec 2007
Real Name: Bill
Location: USA
Posts: 1,842
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.....
__________________
SS Daytona White
SS Daytona Black
LV Submariner
GMT Master Pepsi
14060M COSC
CPCC is offline   Reply With Quote
Old 25 February 2008, 04:14 AM   #12
steel4me
Banned
 
Join Date: Dec 2007
Real Name: SteelMan
Location: Somewhere
Posts: 725
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 ........
steel4me is offline   Reply With Quote
Old 25 February 2008, 04:15 AM   #13
padi56
Moderator & 2014 La Royale Patron
 
padi56's Avatar
 
Join Date: Jun 2005
Real Name: Peter
Location: Llanfairpwllgwyng
Watch: ing you.
Posts: 36,344
Quote:
Originally Posted by mike View Post
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.
Excellent post Mike and 100% agree about your statment (well grounded knowledge of the subject is critical.)
__________________

ICom Pro3

All posts are my own opinion and my opinion only.

"The clock of life is wound but once, and no man has the power to tell just when the hands will stop. Now is the only time you actually own the time, Place no faith in time, for the clock may soon be still for ever."
Good Judgement comes from experience,experience comes from Bad Judgement,.Buy quality, cry once; buy cheap, cry again and again.

www.mc0yad.com

Second in command CEO and left handed watch winder
padi56 is offline   Reply With Quote
Old 25 February 2008, 04:27 AM   #14
bgriz
2014 La Royale Pledge Member
 
bgriz's Avatar
 
Join Date: Nov 2007
Real Name: Brian
Location: Chicagoland
Watch: ing the markets
Posts: 2,031
Quote:
Originally Posted by mike View Post
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.

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.
__________________
116610 SubC
16710 GMT II PePsi
216570 Exp II 42
116520 Daytona
1680 Red Sub mkV
Hers- 178274 midsize DJ Rhodium/Roman
Omega Speedmaster Apollo 11 35th Anniversary LE Panda 3569.31.00
bgriz is online now   Reply With Quote
Old 25 February 2008, 04:34 AM   #15
CPTL
"TRF" Member
 
CPTL's Avatar
 
Join Date: Jul 2007
Real Name: Kevin
Location: Texas on my mind
Watch: Sub Date; SS/WG DJ
Posts: 2,427
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.
CPTL is offline   Reply With Quote
Old 25 February 2008, 04:36 AM   #16
CPTL
"TRF" Member
 
CPTL's Avatar
 
Join Date: Jul 2007
Real Name: Kevin
Location: Texas on my mind
Watch: Sub Date; SS/WG DJ
Posts: 2,427
Quote:
Originally Posted by steel4me View Post
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?"...
Were those comments really necessary to make your point? And I certainly hope you didn't actually say that.

Sorry--that whole post is just irritating.
CPTL is offline   Reply With Quote
Old 25 February 2008, 04:50 AM   #17
SPACE-DWELLER
"TRF" Member
 
SPACE-DWELLER's Avatar
 
Join Date: Apr 2007
Real Name: Bo
Location: Denmark
Watch: Rolex, of course!
Posts: 22,599
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.
__________________
With kind regards, Bo

LocTite 221: The Taming Of The Screw...
SPACE-DWELLER is offline   Reply With Quote
Old 25 February 2008, 04:53 AM   #18
Perdu
"TRF" Member
 
Perdu's Avatar
 
Join Date: Jul 2007
Real Name: Gary
Location: GMT-6
Watch: GMT
Posts: 3,351
I don't consider a Rolex an investment but an expense. Also, you need to factor in the $500- servicing costs every 5 years.
__________________
Omega Seamaster 300M GMT Noire
Omega Seamaster Aqua Terra 8500

Benson 1937 Sterling Silver Hunter
Perdu is offline   Reply With Quote
Old 25 February 2008, 04:56 AM   #19
Texsubmariner
"TRF" Member
 
Join Date: Nov 2007
Real Name: Khanh
Location: Texas
Watch: SSGMTc
Posts: 1,233
Quote:
Originally Posted by CPTL View Post
Were those comments really necessary to make your point? And I certainly hope you didn't actually say that.

Sorry--that whole post is just irritating.
+1.
__________________
Sea Dweller M series
SS GMT IIc M series
Omega SMP Electric Blue Dial
Wife's SS WG MOP Ladies DJ Z series
Texsubmariner is offline   Reply With Quote
Old 25 February 2008, 05:01 AM   #20
mdx77
"TRF" Member
 
mdx77's Avatar
 
Join Date: Jan 2008
Real Name: Kurt
Location: Philly Burbs!!
Watch: 16610LV
Posts: 2,946
Quote:
Originally Posted by Texsubmariner View Post
+1.
+2
__________________

"But, when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security."

Declaration of Independence
July 4, 1776
________________________________________________
Omega Seamaster
Breitling Super Avenger
Rolex Oyster Perpetual Date Submariner 50th Anniversary
mdx77 is offline   Reply With Quote
Old 25 February 2008, 06:28 AM   #21
East Bay Rider
"TRF" Member
 
East Bay Rider's Avatar
 
Join Date: Oct 2007
Real Name: Bill
Location: East Bay RI
Watch: GMT-II 16710LN
Posts: 9,749
Quote:
Originally Posted by bgriz View Post
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.

You omitted one valid point. The $$$ tied up in the mutual fund cannot be used for the entire term. The Rolex can be used every day and still appreciate in value.
No I'm not poking holes in your sound financial advice, just justifying spending more $$ on Rolex -
__________________
I bought a cheap watch from the crazy man
Floating down canal
It doesn't use numbers or moving hands
It always just says "now"
Now you may be thinking that I was had
But this watch is never wrong
And if I have trouble the warranty said
Breathe In, Breathe Out, Move On
J. Buffett
Instagram: eastbayrider46
East Bay Rider is offline   Reply With Quote
Old 25 February 2008, 06:35 AM   #22
bgriz
2014 La Royale Pledge Member
 
bgriz's Avatar
 
Join Date: Nov 2007
Real Name: Brian
Location: Chicagoland
Watch: ing the markets
Posts: 2,031
Quote:
Originally Posted by East Bay Rider View Post
You omitted one valid point. The $$$ tied up in the mutual fund cannot be used for the entire term. The Rolex can be used every day and still appreciate in value.
No I'm not poking holes in your sound financial advice, just justifying spending more $$ on Rolex -
Actually sure it can. I can not only see the actual market value of the mutual fund $$$ on any business day, but I can convert it to cash anytime I like. There is no term nor is it tied up. All the better so one can liquidate and buy the next Rollie at any time.
__________________
116610 SubC
16710 GMT II PePsi
216570 Exp II 42
116520 Daytona
1680 Red Sub mkV
Hers- 178274 midsize DJ Rhodium/Roman
Omega Speedmaster Apollo 11 35th Anniversary LE Panda 3569.31.00
bgriz is online now   Reply With Quote
Old 25 February 2008, 06:43 AM   #23
jasonbellevue
"TRF" Member
 
jasonbellevue's Avatar
 
Join Date: Mar 2007
Real Name: Jason
Location: at home
Posts: 5,125
I view the money that I spent on my Rolex watches as investment in my happiness, and that's all that matters.

I have real investments in real estate, mutual funds, bonds and stocks.
__________________
jasonbellevue is offline   Reply With Quote
Old 25 February 2008, 07:01 AM   #24
f16570
"TRF" Member
 
f16570's Avatar
 
Join Date: Jan 2007
Real Name: F
Location: Scotland
Watch: Exp II White Face
Posts: 4,287
Sorry, but is just a watch.
__________________
Why have what's new when you have what's best.
f
f16570 is offline   Reply With Quote
Old 25 February 2008, 07:19 AM   #25
Spark
"TRF" Member
 
Spark's Avatar
 
Join Date: Oct 2006
Real Name: Mark
Location: U.K.
Watch: 1655 Explorer II
Posts: 2,086
Hi Brian,
I collect vintage watches and wear and enjoy them.
I buy what I like, but I do buy with the thought in the purchase of ''will I get my money back/make a few bob if I sell later''.
I am not wealthy/rich I am on a modest income, so I don't want to throw money away.
Although I don't actually buy with future return as the main reason it is always a consideration.
I will one day sell my watches on and hopefully they will add a little extra cash to my retirement plan.
If I just put the cash in the bank it would get spent, but if I put the money in to watches I can't spend it and I get a huge amount of enjoyment out of them to boot.
Just my little eccentric view on my sad WIS life
Spark is offline   Reply With Quote
Old 25 February 2008, 07:28 AM   #26
Welshwatchman
Moderator & 2014 La Royale Patron
 
Welshwatchman's Avatar
 
Join Date: Apr 2006
Real Name: Paul
Location: Wales, UK
Posts: 13,297
I consider my Rolex collection a fine investment.

There again I do live in the Bizzaro world.
__________________
..33
Welshwatchman is offline   Reply With Quote
Old 25 February 2008, 07:30 AM   #27
ghost2000
"TRF" Member
 
ghost2000's Avatar
 
Join Date: Dec 2007
Location: Italy
Posts: 69
If we talk in terms of money return, rolex is not an investment, there are best ways to invest money, but if the talk about reallocation of assets, there are not so many goods in the world that you can buy, use and sell getting, at least, the same money you spent, maybe only rolex and ferrari
__________________
Officine Panerai: history on my wrist
ghost2000 is offline   Reply With Quote
Old 25 February 2008, 08:23 PM   #28
jac67
"TRF" Member
 
jac67's Avatar
 
Join Date: Nov 2006
Real Name: John
Location: Australia
Watch: Me
Posts: 1,954
Well, in my opinion a Rolex is DEFINITELY an investment, however, let me explain.

I am not talking about modern off-the-shelf Rolex.

Like any investment, you must carefully choose your asset, research trends etc.

Look at the stock market. This is a fickle environment where decisions and movements in a company have nothing to do with the earnings. The price can fluctuate dramatically simple because of panic and/or expectations.

The vintage Rolex market has been very strong for quite some time, and with more collectors/investors coming onboard it will get even bigger.

As with stocks, Rolex prices may fluctuate up and down, but rare, scarce and interesting watches will command high prices for a while longer.

Look at the recent prices of Comex, PN Daytona, DRSD, Moonphase etc.

I was offered a 1665 Comex last year for US$63k, but declined, now they are fetching US$150k+. Saw one for sale today for US$190k.

Plus if you like Rolex, it makes it easier to part with the money.

To be called an idiot is narrow-minded as well as ignorant.

My DRSD, Red Sub and Comex have DOUBLED in value in 12 months, not bad for an idiot!

However, I point out that I didn't buy them simply because of "potential" gain, BUT because I really like them too.


John.
jac67 is offline   Reply With Quote
Old 25 February 2008, 08:29 PM   #29
MAXI DIAL
"TRF" Member
 
MAXI DIAL's Avatar
 
Join Date: Apr 2007
Real Name: Jamal
Location: Dubai, U.A.E.
Posts: 863
I believe ROLEX will stop offering discounts on SS models.
__________________
SS Explorer II
SS Submariner C LV - SS DATEJUST II - MILGAUSS GV - SS GMT-MASTER II C - SS/P YACHT-MASTER
MAXI DIAL is offline   Reply With Quote
Old 25 February 2008, 09:28 PM   #30
vukotab
"TRF" Member
 
vukotab's Avatar
 
Join Date: Aug 2007
Real Name: Vukota Brajovi
Location: Belgrade,Serbia
Watch: ing movies!
Posts: 3,592
I don`t like to look on my watches in that way.Like Jason said,I like to think of them like "investment in my hapiness".
I`m aware that my Expy II will be worth of some serious money even twenty or thirty years from now,and I have nothing against it...
vukotab is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

Banner Of The Month
*Banner Of The Month*
This space is provided free of charge to outstanding horological resources.







Copyright 2004-2015, The Rolex Forums. All Rights Reserved.

ROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEXROLEX

Rolex is a registered trademark of ROLEX USA. The Rolex Forums is not affiliated with ROLEX USA in any way.