When people normally think of an investment, they picture stocks, bonds, or savings. And all of those are fine to pursue with a licensed professional, however there are some everyday consumer goods purchases that defy logic and appreciate in value as well. In this case we're talking about the trending and historical prices of Rolex watches and their value in the long term. If you're at all aware of watch news, then you've undoubtedly seen some of the recent record breaking Rolex watches that have come through the big auction houses this year. The biggest recent example was the Rolex "Bao Dai" watch that sold at Phillips Geneva Watch Auction: Five for over $5 Million last May. It was a record breaking event that surpassed all expectations. The special timepiece was a Rolex reference 6062 in all gold with diamond hour markers and a black dial, one of only 3 made in that configuration. It is extra special because it was owned by the Last Emperor of Vietnam. This is an extreme example and not the norm, but it gives you an idea of the Power of The Crown.
Now lets take a look at what all this means for us average Joe Rolex watch buyers. There are two main ways to buy a watch, new or pre-owned. Each have their own pros and cons. When you buy a new Rolex through an authorized dealer of the company, you are guaranteed exclusivity and warranty. However, you are also most likely going to pay sales tax and take an initial depreciation hit. Depending on the model you purchase, the depreciation may be minimal or even non existent. And this is because Rolex does an incredible job at constricting supply on certain models. Today, its the Rolex Daytona model in stainless steel variant which is getting all the attention and speculative dollars. More specifically it's model 116500 watch which comes in 904L type stainless steel with a black ceramic bezel and chronograph (stop watch) functionality. Authorized dealers get very few of these in stock and most all of them have long waiting lists of clients trying to get their hands on one. It is specifically this constriction of supply and high demand combo that creates an inflationary situation for the watch. In this situation, should you be one of the few lucky buyers to snag one from an authorized dealer, you would seem to gain an instant appreciation in value on your purchase. Why you may ask? Because on the pre-owned market these Daytona's are commanding thousands of dollars in premiums (in New condition with box and papers). It is in that market where this grail watch can realize its true value. Average pre-owned list prices can easily approach $4,000 to $5,000 over retail MSRP. A watch like this also has the power to make the whole pre-owned market for Rolex very hot and contribute to rising prices overall.
If you're looking to make a purchase on the pre-owned side as your initial starting point into the Rolex family, then we would make some slightly different recommendations for long term value. You could look to create a similar supply and demand scenario in your favor by targeting in-demand, or possibly rare discontinued Rolex sports models. The idea is to look for value where others don't. An example would be the Rolex Sea-Dweller which has had many iterations in the past, similar to the Rolex Submariner, however where it lags behind the Submariner is in vintage and pre-owned model appreciation. One could argue that many of the low production or vintage model Sea-Dwellers have more upside percentage potential because they haven't been completely inflated by speculaters yet. Or if you're more comfortable with the winning horse, you could just go on a different path to long term pre-owned value via the Rolex flagships and just buy a vintage or rare model Rolex Daytona or Submariner anyway. Both of these watches are more proven examples of desirability and appreciation, but buyer beware and don't overpay and look for the best condition examples that you can find.
Investments like these, if researched and purchased properly, can be an excellent store of value. They have a proven track record of appreciation in many cases, but best of all you can wear them. They are tangible items. There aren't many items that can have long term appreciation potential and can be worn to a wedding like a Rolex can. So we say, go ahead and treat yourself to "A Crown for Every Achievement" as Rolex used to say.
If any of these models look like a good fit for your collection, then click here to buy your next Rolex.