How investing in Rolex watches beats stocks, gold and real estate – models like the Cosmograph Daytona, Submariner, Date and Datejust have exploded on the resale market
Back in 2011, if you were given the choice of a 50-gram bar of gold, a US$5,000 index fund invested in the Dow Jones Industrial Average or a Rolex Submariner, which would you pick as the best investment?
If you chose the Submariner, you’d have come out ahead, according to new data from Bob’s Watches, a leading reseller of Rolex watches.
For the past decade, Bob’s has been buying and selling thousands of watches using a consistent pricing strategy that has given the company unique insights into the real market value of every Rolex model.
“We are the only company that can go back and grab 10 years of data,” CEO Paul Altieri said.
Rolex makes about a million units each year, according to Forbes, but the popularity of the brand means demand vastly exceeds the supply of new timepieces, leading to a robust secondary market for pre-owned watches.
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And global demand is picking up.
“Rolexes have been a good investment over the years, but not like the last five,” Altieri said.
Indeed, the sales numbers for Rolex show an uptick beginning in 2017, followed by an even sharper bump up in 2020. Now the average Rolex price is more than US$13,000 – nearly three times the 2011 average of US$5,000.
Rolexes have been a good investment over the years, but not like the last five
While the price roughly tracked the performance of the Dow Jones Industrial Average, Rolex pulled ahead in the past year. Other investments like gold and real estate (as tracked by average home prices) were nowhere close.
But even at these elevated prices, Altieri still maintains that Rolex is a “relatively affordable luxury”, especially when compared to other Swiss brands like Audemars Piguet and Patek Philippe, which routinely go for well north of US$30,000.
The closest Rolex offering to that echelon of watches is the Cosmograph Daytona, which is now worth more than US$31,000 on average in the secondary market, even though it sells at retail for roughly a third of that price.
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“Before you leave the store it’s worth double or triple what you paid,” Altieri said.
And that’s if you can even find an authorised dealer who will sell it to you.
“People have waited a year or two for their name to come up on the buyers list – they’re not going to flip it,” Altieri said.
In terms of sheer volume, the classic steel Submariner is far and away Rolex’s most popular line, and its price performance has largely tracked with the overall brand average.
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Still, the frenzy over the brand has also given a lift to what might be considered entry-level models, such as the Date and Datejust, which for the first time are worth more than their retail price on the secondary market.
Although past results are never a guarantee of future performance, it’s reasonable to expect that these price trends could continue, given the constrained supply of new product entering the market.
The current total value of the pre-owned luxury watch market is estimated to be US$20 billion, according to a report from McKinsey, and is expected to top US$29 billion by 2025.
Altieri said that while stock market index funds will likely continue to be the prudent, safe choice for investing, they’re not all that interesting to own.
“Most people have never even seen a share of stock, much less held one,” Altieri said.
A watch, he points out, is at least something you can touch every day.
This article originally appeared on Insider
It's fascinating how Rolex watches have become formidable investments, outstripping traditional assets like stocks, gold, and even real estate. Bob's Watches, a prominent Rolex reseller, has gathered invaluable data over the past decade, providing unique insights into the brand's market dynamics. The surge in demand has propelled the resale value of Rolex timepieces, with models like the Submariner, Cosmograph Daytona, Date, and Datejust significantly appreciating.
Rolex's limited annual production, about a million units, fails to meet the soaring global demand, leading to a thriving secondary market. This scarcity is a primary driver of their escalating value. The Submariner, a classic steel model, has particularly seen remarkable popularity and consistent price performance, followed by other entry-level models like the Date and Datejust, which now command higher prices than their retail values.
Paul Altieri, CEO of Bob's Watches, highlights the exponential growth in Rolex prices, surpassing the Dow Jones Industrial Average and significantly outpacing gold and real estate investments over the past few years. The astonishing growth, especially in the last five years, has established Rolex as an attractive investment option.
The escalation of Rolex's worth isn't just confined to the models generally available. Exclusive timepieces like the Cosmograph Daytona, initially sold at a fraction of their current resale value, now command over $31,000 on average in the secondary market. The scarcity of these high-demand models often leads to waiting lists at authorized dealers.
Looking ahead, while past performance doesn't guarantee future gains, the constrained supply of new Rolex watches entering the market suggests the likelihood of these price trends continuing. McKinsey estimates the current value of the pre-owned luxury watch market at around $20 billion, expected to surpass $29 billion by 2025, signifying the enduring appeal of these timepieces as investments.
Paul Altieri underscores that while index funds remain a safe investment choice, the tangibility and everyday interaction with a watch make it a more engaging investment option for many, contrasting the intangibility of stocks.
This rise in the value of Rolex watches reflects the blend of craftsmanship, brand allure, and scarcity, positioning them as not just timepieces but also as sound investments in today's market.
To provide a comprehensive understanding:
- Rolex Watches: Known for their craftsmanship, limited production, and global demand, Rolex watches have witnessed an unprecedented surge in resale value, surpassing traditional investment assets.
- Secondary Market Dynamics: Limited supply against soaring demand has fueled a robust secondary market for Rolex watches, contributing significantly to their escalating value.
- Rolex Models' Performance: Specific models like the Submariner, Cosmograph Daytona, Date, and Datejust have shown remarkable appreciation in their resale values, often exceeding their original retail prices.
- Investment Performance Comparison: Rolex's price surge has outpaced the Dow Jones Industrial Average, gold, and real estate investments over the past few years, making it an attractive investment option.
- Future Projections: While past performance doesn't guarantee future gains, the constrained supply of new Rolex watches indicates the potential continuity of these price trends, as forecasted by McKinsey's estimations for the pre-owned luxury watch market.
- Investment Appeal: The tangibility and daily interaction with a watch make it a more engaging investment choice compared to the abstract nature of stock investments, according to Paul Altieri, CEO of Bob's Watches.
