Rolex As An Investment = Bad Idea

[Chester01]

Originally Posted by Pay M3

Why do people continue asking this? All it takes is some simple math to realize it’s not a good investment and is in fact meant to be worn as a watch. This same argument gets made in other markets as well and it blows my mind.

8k over a 30 year period at a modest return of 7% with traditional investments will net you more of a return (roughly 55-60k) than your average Rolex unless you get lucky with a unicorn piece.

Stop worrying about this stuff and buy the thing.

May not be a good investment, but plenty of gray dealers are making out quite nicely on these watches.

[beshannon]

Originally Posted by Chester01

May not be a good investment, but plenty of gray dealers are making out quite nicely on these watches.

Arbitrage risk has always been a strategy. Some have the appetite to trade on risk and do not care about the actual commodity being traded.

[jps3b]

Originally Posted by zengineer

I think some people need to stop going into convulsions every time someone on the forum refers to a Rolex as a good investment. Normal people use the term investment as a way to describe "money well spent" or "a good purchase decision". You have a need or want, you spend money to fill the need or want. How completely the need or want is satisfied for how long tells you if you spent wisely.

We all know a watch is not a mutual fund, but you also cant wear a mutual fund on your wrist.

Buying most Rolex sport watches at retail is a good choice once you've decided to spend stupid money on a wristwatch. It's a "good investment" compared to buying most other brands in the same price range...especially at retail.

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This

[JParm]

Originally Posted by Zakalwe

I honestly suspect that there’s a misunderstanding sometimes with investment questions between those asking and those answering.

I imagine many “Rolex as investment” inquirers are perfectly well aware that Rolex is not going to get you a return on your money in the same way as stocks or property might.

However, a watch that costs x, gives 10 years of pleasure as a daily wearer and can be sold for say x+10% is a great overall investment if not a sound financial one.

Agree.

[Ococ]

Originally Posted by beshannon

Did you sell?

Then you realized no gain and this line of reasoning is deeply flawed.

No!

But i bought extra Daytona's for investment.

[IMG][/IMG]

[jeffnnj]

If you're talking about luxury goods as investments, the Chanel bag I bought for $5000 for my fiancee's birthday last year is selling for close to $7k online now.

[DtownRRS]

It's the thing you tell your wife so you can buy it....

[HONDABBQ]

While many choose to think of their Rolex as an investment piece, albeit a modest one.
If a Rolex is your only investment in your portfolio, you will be sad when the future hits. I have investments and save for the future and I have a pension. I like to think of it as parking my money while I can enjoy it. No one knows the future, but history dictates you can wear a Rolex and get your initial investment back if/when you want/need it, sometimes at par or if you are lucky a small premium.

[Gtecko]

Originally Posted by Casey VP-26

Depends on how much you pay.

totally agree ... if you buy a discontinued model at a good price, hold on for it for even a couple of years, you can make some good return.

[calatravato]

I will venture to say that a Rolex as an investment is a better proposition as interest rates are lower. Before last year, I think a lot of demand was driven by the “search for yield”. Pre-2018, you could put a portion of your money in t-bills, which yielded a fraction of a percent, or you could put it into a Rolex, which yielded nothing (which isn’t much less than a t-bill deposit) and have something to actually consume and enjoy.

As rates go up, opportunity costs of buying a Rolex become higher. Yes, rates went up last year, and the global economy softened a bit, but I would imagine Rolex prices lag those indicators. Especially when we have this situation with waiting lists, hype, etc.

[Juan Luis]

Had someone purchased ten plus Daytona's in 1977 when they sold for around 950-1000 USD, I am sure would it have been a great investment! LOL...

[Juan Luis]

Originally Posted by DtownRRS

It's the thing you tell your wife so you can buy it....

This!

[Chilly Coconut]

Originally Posted by peterpl

That is a bad investment. LOL

if its ££££ you'd expect at least £££££ when you sell to consider it an investment.

Really? Not all investments require appreciation in the principal amount to be considered good investments. When you buy a bond for ££££, if you buy it at par, you expect to get exactly the ££££ that you paid for it when you sell it at maturity. No more, no less. The investment return in that case comes in the form of dividends (income) paid over the life of the bond.

Correlating this to Rolex ownership, one could view the enjoyment of owning and wearing the watch as the “dividends”, or return, and if they were to sell it one day for exactly what they paid (the par amount of “principal”), they might feel that was a good investment in much the same way as the bond investment.

Don’t be so quick to laugh at others, especially when you’re at risk of exposing your own ignorance of a topic.

[JonnyBCisco]

Originally Posted by jps3b

You definitely can’t argue those number. Facts are facts. But it’s hard to put a monetary value on wearing and enjoying said time piece over 30 years and still at the very least tripling your money. The endless hours of enjoyment you get wearing the watch, talking about them here on TRF and the excitement of hunting for your next one. So for me, that indeed makes Rolex a good investment. Sorry for being in the minority.

You only triple your money if you sell it! And if you sell it you no longer have the watch to enjoy.

[MR. STEEL]

If you can't afford 2 don't buy 1

[Atone]

Originally Posted by MR. STEEL

If you can't afford 2 don't buy 1

i agree, buy 3 or 4.

or just write a nonsensical post on TRF and call it a day . . .

[envuks]

We need to make a sticky titled “buying a Rolex is not an investment” and have everyone post supporting statements as to why a Rolex is a horrible investment.

Then maybe we can censor use of the word “investment” in this forum. It’s really an overposted subject and takes away from what this forum “should” be about: enjoying these watches

[Chilly Coconut]

Originally Posted by envuks

We need to make a sticky titled “buying a Rolex is not an investment” and have everyone post supporting statements as to why a Rolex is a horrible investment.

I don’t think people are suggesting that a Rolex is a horrible investment....just that a watch, any watch, should not be viewed as an investment but rather should be bought to be worn and enjoyed. That doesn’t necessarily make a Rolex “a horrible investment”.

[77T]

Broad statements about investing in Rolex are always troublesome


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[doboy007]

Originally Posted by Pam673

All the current Rolex steel watches can be sold for alot more than the recommend retail price.

False. Explorer lines, DJ lines, etc don’t command a premium

[dtwer]

Originally Posted by peterpl

That is a bad investment. LOL

if its ££££ you'd expect at least £££££ when you sell to consider it an investment.

Actually in the case of some SS models such as BLRO it's like from ££££ to ££££££££.

[harvey]

They are investments in you how they make you feel...enjoy them for what they are.

[envuks]

Originally Posted by Chilly Coconut

I don’t think people are suggesting that a Rolex is a horrible investment....just that a watch, any watch, should not be viewed as an investment but rather should be bought to be worn and enjoyed. That doesn’t necessarily make a Rolex “a horrible investment”.

In the context of actual investments, a Rolex is a horrible investment unless you’re lucky enough to buy a unicorn piece (like the 16610lv).

There have been many statements highlighting return on money invested stock market compared to a Rolex. The comparison never seems even close.

A Rolex retains value. Most have either no or little depreciation AD to secondary market (10%-30%). I think a lot of folks get caught up that some models are so in demand they sell above msrp, hence the investment misnomer.

Let’s apply this same scenario to something else, any retail good. Call it a snowblower. Say I could get said snowblower at wholesale cost (call it $500 instead of $1000). Would you consider the snowblower an investment? Maybe you get a few years of use out of it and can sell it for $500 (or even $600).

I think most people would call this a “good deal” rather than an investment.

[Tony1T]

I'm confident people will be able to their money back especially with the SS models. I bought mine to wear and pass down to my kids

[mjclark32]

Originally Posted by Pay M3

Stop worrying about this stuff and buy the thing.

Didn't it take you a couple years to finally pull the trigger on one?

[Pay M3]

Originally Posted by mjclark32

Didn't it take you a couple years to finally pull the trigger on one?

Yes, unfortunately I always battle myself for a bit with large purchases. Got to make sure I really want the item and in this case I do want the item.

[Red65]

Many times it's easy to confuse the adjectives "Investment" and "Asset". Each of these categories have items which can be categorized as: good, better, or best.

IMO of all the material non essential objects that exhibit/convey "purpose/use", "nostalgia", or "class" of some nature, I would consider the right Rolex to be a better "asset" with good cash liquidity and often times some return.

I'm sure most would agree historically speaking that an "investment in a particular well known "Index" fund would yield best returns with better liquidity.

Not every exchange of money can be for the purpose of investment, if you're able to derive some pleasure/excitement/fascination from a good asset, than hats off to you, your money was not wasted.

[Seibei]

A normal mass produced Rolex is not an investment.

You can however buy a Rolex as an investment, but that is not the kind of watch I would wear every day. If you cover all the bases, rarity, condition and provenance you may do very well indeed investing in a Rolex watch.

[mobster600]

Brand new cars and technology are good investments LOL

[mk2jag]

I buy watches to use and enjoy. If I sell then, of course, its nice to get back the money but that is never my intention. A Rolex kept in good condition will retain its value and I like that about the brand. On a similar note, I have a friend with two rare pristine Ferrari's in his garage. They never get used because they are investments....Too bad because he is missing out on a lot of fun.