Even if you are new to the luxury watch scene, you may have heard that Rolex brand watches are the ultimate in terms of style, prestige and investment value. But you’re probably wondering how a watch can qualify as an investment in the same way as a car, a house or your mutual fund.
Reasons They Make Good Investments
Rolex is the best known and most respected watchmaking house in the world. Having produced quality timepieces since 1905, the brand has developed a loyal following of collectors and enthusiasts always on the lookout for their next luxury watch purchase. However, a Rolex watch is more than just a style statement. A well-chosen Rolex timepiece can be a shrewd investment opportunity because the popularity and manufacturing practices of the brand mean that Rolex watches retain their value. Rolex watches make good investments for a several reasons, including:
Rolex makes more than 800,000 watches a year, but that’s still not enough to meet demand, and many models have extensive waitlists. Authorized dealers don’t have the inventory of some models to even keep them in display cases. Limited edition models are rare because of the nature of the release. Only several thousand limited-edition models are produced, so the demand is always higher than the supply, ensuring they appreciate consistently. This also means that limited edition watches are worth more on the pre-owned market than you pay at an authorized dealer as soon as you leave the shop.
The watch materials also affect the market value of the Rolex models. While you may assume that platinum, gold and diamonds offer the best investment opportunity due to their high value, Rolex models made from these materials are often expensive to purchase and difficult to sell, leading to dramatic depreciation.
Stainless steel watches are currently more in demand than their gold and silver counterparts, so they are harder to find in authorized dealers. As a result, these are currently savvy investments, although that may change in the future if tastes shift to gold and silver. It’s uncertain if this demand for stainless steel watches is the result simply of a modern aesthetic or due to its increased durability, which makes it a more viable investment. Stainless steel also depreciates more slowly than gold or silver at 20%, compared with 30 to 40% for gold or two-tone watches.
2. Brand-Implemented Annual Price Increases
Rolex has consciously chosen to increase prices yearly, and not just as a result of inflation. This luxuriation process elevates the perceived luxury of an item over time as disposable middle-class incomes increase. For example, the Submariner (no date) – 5513/14060/14060(M) sold for $150 in 1957. Adjusted solely for inflation, it should cost $1,416 today, yet it sells for $6,300, and a pre-owned version sells for just under $11,000. By raising prices beyond the amount of inflation, Rolex successfully protects the value of its watches by making them worth more long-term, preserving your investment in the pieces.
Source: Nikola Vukovic/Shutterstock.com
3. Increase Value While You Wear It
Unlike other investments, like homes or stocks, there’s no real work involved to increase the value of your watch. To add value to your house, you may need to improve it by adding a room or upgrading the appliances. With stocks, you need to spend time monitoring them and buying and selling as the value shifts.
The Best Rolexes for Investment
When looking to invest in a Rolex, you want to look at Rolexes that meet the following characteristics of a good investment piece:
- Watch models on a waitlist at authorized dealers.
- Watch models with low production numbers.
- Watches made with stainless steel (although this may change with taste in coming years).
Depending on your goals, you can also invest in pre-owned watches, but make sure you know how to tell if a Rolex is real to avoid investing in a worthless replica. Make sure the serial numbers on the certificate of authenticity match the serial numbers on the watch, which should be laser engraved, not etched. Also, check the crown etching on the glass at the six o’clock mark.
Currently, three Rolex models are excellent investments:
- The Rolex Submariner is a Rolex classic and has been since it was introduced in the 1950s. The Submariner Hulk 116610LV was discontinued last year and has catapulted in value since. Other Submariner models, such as the Kermit 166110LV, are also excellent investment choices.
- The Rolex GMT Master II is another great investment option due to its discontinued status. The Batman 116710BLNR and the Coke 16710 are particularly popular.
- The stainless steel Rolex Daytona has been their most popular chronograph, but it is also nearly impossible to buy new from an authorized dealer because of waitlists.
Shop Luxury of Watches for the Perfect Investment Rolex
Luxury timepieces are a valuable addition to your investment portfolio and a clever method of diversification. Rolex watch models are among some of the best investment pieces on the market, but you need to know which models appreciate most and offer the best resale value. If you are looking to add a Rolex timepiece to your collection or purchase a Rolex as an heirloom or investment, Luxury of Watches has an extensive inventory of new and pre-owned Rolex watches to suit any taste. Explore our collection today.