Using Rolex as Investments --- Why not?

[beshannon]

Originally Posted by IamJacky

I invested in buying rental properties back in the late 2000's and early 2010's, and finally paid off most of the mortgages by now.

Today, the passive income generated from these properties now allows me to be able to purchase these Rolex watches. Not to mention the value of these properties have doubled if not tripled since purchase. If I had reversed the order and "invested" in Rolex watches, I would never have been able to own any of the rental properties I have today.

This is too much common sense for those looking to justify the purchase of high end luxury jewelry under the guise of "investment".

But people are freel to do and believe what they wish even in the face of facts.

[MillyS]

I wouldn't class watches as investments in the slightest. The fact that Rolexes hold or appreciate in value are only paper gains (until you sell). Do I like the fact that my submariner is worth more...yes who wouldn't, but that's a phantom bonus and will never be realised (hopefully I will never be in a position to sell).

I think the OP is missing some important costs of investing in watches. Mainly storage (personal safe or bank safe) but also insurance while holding the watches. Add that up and you'll find that your ROI is negative.

A buy and hold strategy is pointless.

[CashGap]

Originally Posted by samgobigs

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.

You typed the key word.

[Driver8]

Originally Posted by 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.

I've got to be honest, but that kind of sums it up for me. I've been into watches for about 30 years now, and Rolexes specifically for a considerable proportion of that time, and for me it's always been about enjoying wearing and owning them - the precision, the movement, the details, and the simple fact of having a little mechanical marvel on my wrist. I only ever buy for me and my own enjoyment, and certainly not what someone on FB or YouTube tells me I should own. I'm not a watchmaker or anything like that, but when you've been really immersed in a subject as a hobby for quite a while you can't help but be passionate about it, and pick up quite a lot of information. So it grates on me when (especially on social media) you get people turning up with not even a desire to know anything about the watches other than their "investment potential" and "resale value". Sorry to say it, but for me it really "dumbs down" the brand image, and turns what should be a luxury and aspirational item to be worn and enjoyed, into nothing more than a stock to be bought and sold.

I know I shouldn't let it bother me, but I've really noticed the change in dynamic over the years and it's not a direction I particularly like. Plus (from a highly selfish perspective!) it means it's now harder for me to get pieces I like and that I would actually wear, instead of leave it festering in a safe.

[GreatScott]

Much better than a digital picture for $69M if you ask me. Go for it.

Sent from my Pixel 5 using Tapatalk

[loftycomfort]

Buying a watch, wearing it, enjoying it, and seeing it appreciate in value. That's beautiful and awesome.

Buying a watch, NOT wearing it, but enjoying it as a piece of art or feat of engineering, and seeing it appreciate in value. It's not how I'd enjoy my watches, but it's cool too because the owner is still enjoying it in his/her own unique way. David Khalil has a recent video about that.

But this, it just rubs me the wrong way:

"...why not buy this watch and store it in a safe, for the sole purpose of investment?"

[calatravato]

When people discuss watches as investments, they need to discuss the risks and true costs of owning a watch. There are many carrying costs, transaction costs, and risks involved:

1) Sales tax.
2) Servicing costs every 5 years or so.
3) If you're not a professional seller, you'll need to pay a VIG to the dealer buying the watch you are selling. It's often 15-20% or more of the low end of the Chrono24 price range.
4) If you try to sell the watch yourself, there are a bunch of selling risks I think we're all aware of. Not to mention the time spent taking pictures for listing a watch, listing costs, etc.
4) Wear and tear of the watches will bring the value of the watch down.
5) Insurance. If you opt not to do insurance, then you face the risk of having the watch lost or stolen.
6) Capital gains taxes on collectibles. Consult your tax advisor for more information.
7) Market risk.

Anything I'm forgetting?

[CFR]

For me, "Can a Rolex be an investment?" is a semantic question. To answer that question, my analysis would be the same if I substituted "Harley" or "Bitcoin" or "Mr. Spock doll circa 1971" or "mutual fund" for "Rolex."

When I think about what I consider an "investment," I look at 3 factors: (a) my risk tolerance, (b) my available time, and (c) my competence and comfort in buying/selling that thing.

If I had a pretty high risk tolerance (because a Rolex may incur high servicing costs, it may get stolen, etc.), and if I had sufficient time on my hands (because buying low and selling high involves more than just clicking a button with Rolex), and if I felt really comfortable buying/selling watches in general, then yes, I'd consider Rolex to be a viable investment for me.

And as others have said, a necessary but not sufficient condition is that I'd actually want to sell it at some point.

[strettyend]

I don’t view as an investment but would I be much less inclined to spend 30-40k on one if I knew the value immediately went to zero or some fraction? Absolutely

[rolexperfect]

What if you get robbed or you dropped your watch on the bathroom floor?

Way better it’s stock / real estate

[2nastie]

Individuals are often confused with what we currently see in the market and the inflated prices but are also failing to realize that not long ago, most Rolex other than the Daytona were trading below MSRP.

People also loosely use the term "investment" and imagine it as something that will continue to make money, yet this "investment" could also lose you money as much as it can gain. An increase in value due to inflation is also not an investment either.

If individuals want to buy watches hoping it is an investment... sure, do whatever you please. But it definitely isn't one; it's more of a speculation.

[JSolution]

All I can say as a matter of fact over the last 13 years or so I’ve owned watches they’ve gone up up up. That is the definition of an investment I believe.

However, my “investing” money goes into other ventures - buying watches doesn’t pay the bills!

[stockae92]

Your money, your choice.

I don't call my watches investment though. I buy them and enjoy wearing them. If you focus on the "return of your investment", every marks and scratches will devalue the "investment" and those will hurt more than they should.

Its nice to see the value of my watches goes up, but that's not why I buy them. My investment portfolio handles the value gain for me, my watches just keeps me happy.

To me, true watch investment will be the ones that you buy, put it in the safe, then sell when the time comes. Now that's an investment. but again, my money, my choice. LOL :D

[espanol]

As an investment, I consider Rolex to be closer to a “cash” allocation, rather than say equities, bonds, or alternatives.

To me, cash is value retention, modest growth, and liquid. Rolex has been a great cash allocation, as it checks all of those boxes. However, as with any luxury brand, we could very well be in a “fad.” Who knows if Rolex will be in style 20, 30, 40 years from now.

I do know one thing though, companies will still be making money years from now, hence, why I don’t compare Rolex to stocks.

[Brich436]

You are speculating if you are buying watches to “invest” in. I don’t speculate in watches. I buy watches to wear and enjoy.

Fact is Rolex does hold value but does not appreciate at the rate of a true investment (10-12% a year compounded over time).


Sent from my iPhone using Tapatalk

[superpop]

These are mass produced fashion baubles that happen to be hyped by social media at the moment. Reminds me of the simpletons that invested in Beanie Babies back in the 90's. I am glad my watches are holding and increasing in value but I would also still go buy a Rolex if it dropped in value over a period of time. In fact I expect that the watches I have will be worth very little by the time I am done with them. If you are buying them as an investment I would encourage you to talk to a competent financial advisor, not a bunch of anonymous people on a watch forum.

[fsprow]

Like any speculation, I certainly don't have a problem with anyone devoting a small part of their investments in watches or any other good they believe will increase in value (vintage autos, art....). I would be cautious about making it a significant part of ones savings, however.

[cgaites]

In the car world, Jeremy Clarkson (formerly the host of Top Gear, current host of the Grand Tour) called trying to rationalize the purchase of a vintage car as an investment to one's spouse, "Man Maths". The joke was basically that even cars that have appreciated wildly, like air-cooled Porsches, are terrible investments after you take into account the carrying costs associated with ownership and transaction costs of buying and selling. Therefore, "Man Maths" we're nothing more than a very quantitative way of lying to yourself and your spouse :)

Personally, I have no problem with others treating watches as investments. I just remind myself every time I start try to use "investment potential" of watches (or cars) to justify a purchase that I am simply doing "Man Maths" to justify a purchase I wanted to make anyway. While it is nice to think that most of my watches are worth more than I paid for them, the best returning of those watch "investments" has only produced a 6.3% annual return since 2003. And that is being pretty generous regarding both service costs over that period and final sales price. Meanwhile, the S&P has returned a little better than 11% over the same period. If I were to average out the "return" across my watch "portfolio" I'm not sure I'm ahead of inflation even though almost every single piece is worth nominally more than I paid for it today.

[hambone1983]

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.

that's like saying you don't have cancer until a doctor gives you a diagnosis

[SDGT3]

From a purely investment standpoint: A Rolex pays no monetary dividends so there is no compounding nor any tax advantages. There are also costs to owning a Rolex such as insurance and servicing.

If you were to take X amount from your investment portfolio and buy a Rolex instead of an ETF or other traditional investment, you have the relative security knowing that it's not going to go down in price and it may experience an increase in value above operating costs. The plus is that you get to enjoy and wear an appreciating asset everyday if you wish and you can't say that about very many things in life.

[Woody]

Originally Posted by Driver8

I've got to be honest, but that kind of sums it up for me. I've been into watches for about 30 years now, and Rolexes specifically for a considerable proportion of that time, and for me it's always been about enjoying wearing and owning them - the precision, the movement, the details, and the simple fact of having a little mechanical marvel on my wrist. I only ever buy for me and my own enjoyment, and certainly not what someone on FB or YouTube tells me I should own. I'm not a watchmaker or anything like that, but when you've been really immersed in a subject as a hobby for quite a while you can't help but be passionate about it, and pick up quite a lot of information. So it grates on me when (especially on social media) you get people turning up with not even a desire to know anything about the watches other than their "investment potential" and "resale value". Sorry to say it, but for me it really "dumbs down" the brand image, and turns what should be a luxury and aspirational item to be worn and enjoyed, into nothing more than a stock to be bought and sold.

I know I shouldn't let it bother me, but I've really noticed the change in dynamic over the years and it's not a direction I particularly like. Plus (from a highly selfish perspective!) it means it's now harder for me to get pieces I like and that I would actually wear, instead of leave it festering in a safe.

Totally agree and also support the comments made by Padi (thanks for sharing the story of your father).

When I first joined the Forum it’s members were people who shared a common love and appreciation for fine watches. The posts were focused on building our collective knowledge through sharing our watches and listening to their various back stories. Major contributors such as JJ and others were passionate about the hobby and posted day in day out to share their excitement and fascination for all things horological. Now it seems that like many other aspects of our lives our hobby has been monetised. For me personally it has started to erode my interest, reading endless posts celebrating conspicuous consumption and all that goes with it is of little interest to me. It is not why I joined and not why I have previously enjoyed the hobby. Maybe it is a generational issue but the saying “he knows the price of everything but the value of nothing” seems very appropriate and perhaps sums up nicely where we now find ourselves.

Anyway, I appreciate that I am rather out of step with the majority in this Forum and that people are free to do as they see fit. Good luck to everyone with investing in watches - I hope it brings you great joy and happiness.

[gerry100]

I have a few fun cars that dont depreciate, and one that is appreciating numerically.

Even the "appreciating" car is not an investment when you add in operating and maintenance, but when I sell and do the final calculation it will show the I had a lot of fun for the buck.

My Rolex will show the same with much greater simplicity

[Marcjvr]

Originally Posted by hambone1983

that's like saying you don't have cancer until a doctor gives you a diagnosis

Nothing like it actually. Ridiculous comparison

[Paul7]

Well, unlike certain stocks, a Rolex watch has never been valued at zero. IMHO the fact a Rolex will hold it's value or increase just makes it easier to pull the trigger when buying an expensive watch. Even my wife's DJ31 bought two years ago is going for $1K more than we bought it for from the same retailer, or it would if it wasn't out of stock.

[1665fan]

SS Daytona’s are investments.....just the way its

[Macnavara]

Originally Posted by padi56

Have to agree this is what owning a Rolex watch should be about it's not like most of today's investment this or that and mostly ££$$$££. Now my Father was fascinated with watches and I can thank him I suppose for the watch bug.Now I can always remember when I was quite young, my Dad saying one day he will have a Rolex.Now myself at the time had no idea what a Rolex watch was.Dad saved hard for many years and had about 2- 3 other jobs eventually in 1980 he bought a Daytona 6263 for around £750 but not 100% sure of price,but originally he wanted a sub, but Daytona was cheaper plus AD gave him a discount.At this time this watch was quite a bit cheaper, than the other sports range,but still a lot of money even back then.He was very proud of his Rolex watch,and it was only worn on special occasions.Dad was always a hard worker but suffered with ill health for most of his short life.Dad had 14 brothers and two sisters,a very large and close nit family.Now this 6263 is not a watch or a money object to me it's part of my Dad, thought I would share a part of his life with you all.


My Father was a miner for almost 40 years,but alas he died at the age of nearly 56 years.He suffered with his heart and chest after WW11 he lied about his age he was just 17 and although a coal collier in then a reserved occupation.He joined the navy and was on aircraft carriers HMS Furious and HMS Glorious.Now the Glorious was attacked by the German battle-cruisers, Scharnhorst and Gneisenau and a direct hit,caused her to sink.Out of a complement of of around 1500 men there were only 39 recorded survivors.My Father was reported missing,presumed killed in action.But was picked up by a Norwegian fishing boat, after being in the that cold sea for almost 32 hours.And without a shadow of a doubt that experience, and 35 odd years in the mines helped shorten his life.My Dad was a very strict but fair, private man, and did not complain about his illnesses.When he died, it was just like I lost my best friend,and now myself in my late 70s, I still think about and miss him.And in the 6263 a small part of him lives on,this watch is very special to me,and would never part with it at any price.

Thanks for sharing Peter....it sounds like your Dad packed a lot into his life.
My Dad passed away last year and I often think about the the expression its not the years in your life but the the life in your years.
Some people do nothing with the 100yrs they live whilst others have all sorts of adventures with their shorter years.
My dad didnt care much for watches infact all I have from my dad is his silver chain but like you i will cherish it as part of him for ever.
I miss my dad alot too ....i was working with him on his house renovation when he was taken ill suddenly and died four weeks later....still in shock now.
Nobody can take our precious memories ......here’s to all the great Dads past and present

[Nutbeem]

Many good points on this thread. A few notes:

1. "Man Maths" is a thing, for sure. The 911 in my garage and the promise of "No depreciation!" is a way to get the spouse on board.
2. Rolex is not an investment on par with an ETF, that's for sure. That being said, as others have noted, it's an awesome way to experience one of life's finest things with virtually no downside (with significant upside potential if you hold it long enough)
3. It's nice to have some durable goods as stores of value, something you can grab quickly if the world goes to shit.
4. LONG LONG term, I think most modern Rolex are can't miss. I paid $16k for my Hulk, and in 15 years, chances are it will be worth $40k. If I can avoid losing interest and just hold on to it, I should come out way ahead.

What an awesome economic opportunity we have to buy and enjoy and hold value. I wouldn't base my retirement on it, but if you have houses and other investments, why not throw $100k into Rolex?

[superpop]

Originally Posted by 1665fan

SS Daytona’s are investments.....just the way its

Awesome, if this is a fact, you should buy up all of the stock on the grey market. I get buying one at MSRP and flipping it but you cannot readily buy one at MSRP. You are assuming it will just keep on going up.

[spacebjorn]

I think someone already said this but 'investment' is not really the right language here. It's more of 'value-retention' on money spent when it comes to choosing a luxury good that you enjoy over the long term.

This becomes more apparent when considering other watch brands.

Nobody likes seeing huge depreciation on something they've spent hard earned money on. As much as we enjoy the horology and the high quality finishing on movements of watch brands like Grand Seiko, JLC or, Glashutte Original, it usually sours on people to see prices on the grey plummeting only after a year of purchase.

I like the flexibility to evolve my collection as the years go. It would certainty make me happier trading away watches that I've owned at a premium price than having to sell at a discount.

[Pw92676]

Originally Posted by Marcjvr

Nothing like it actually. Ridiculous comparison

Thank you for making me not have to reply with the same comment.