Buying any luxury item contains a certain risk and in most cases certain loss. In the world of luxury watches Rolex is often an exception to this rule. Alfredo Paramico, the head of the worlds only regulated watch fund buys only Rolex and Patek Philippe. His personal initial investment of 12 million Euros has grown in value to over 20 millions Euros today, that is around $25 million USD. The newly developed watch fund notched an 18.2 percent gain from inception at the beginning of 2011 through August 2012, beating the 11.8 percent rise in the Standard & Poor’s 500 Index.
Real numbers and a strong foundation that support used Rolex watches for sale can become a commodity not just in style but also in your wallet. Although the notion of “buying a Rolex as an investment” is considered abhorrent by a large segment of the vocal Rolex community, the facts are that Rolex hold and appreciate in value more than almost any Swiss manufacturer in the world. The same Rolex community that aesthetically is appalled at someone buying a Rolex as an investment for idealistic reasons is the same community that has created the passionate and even more importantly, profitable vintage market.
Logically the initial rule of thumb in buying a Rolex as an investment is never pay retail. Like most luxury items, from cars to diamonds, always buy pre-owned. The notion that you can get the same product, with the same quality, without the retail mark-up is an absolute fact in today’s world wide market place and connected economies. Reputable pre-owned, or used Rolex buyers and sellers such as Swiss Watch Expo offer significant savings on pre-owned or used Rolex models not only from five, ten, fifteen years old but also on current market year models less than a year old such as the newest Rolex Deapsea SeaDweller. When buying from a ed dealer always do your research. Read testimonials from past clients, read reviews, great reputations are difficult to fake for the educated buyer.
The reward of a Rolex is in the ownership. That said it does not hurt that an ancillary extension of owning a Rolex is that eventually it could be worth more than you paid for it. Again assuming you did not buy a Rolex from an authorized dealer. An AD or authorized dealer means that they have to sell at a retail price point, that price is largely determined by Rolex, and for the most part these dealers can not sell online. In many opinions buying from an Authorized dealer is rule number #1 in what not to do when searching for your Rolex as an investment.
Now in general for used Rolex, and there are always many exceptions to any rule of thumb in the Rolex world, the large percentage of models that appreciate and hold their value better than any others are the sport models i.e. Daytona, Submariner, Seadweller, Explorer, etc… Common exceptions to this trend are Presidents and more recently some Cellini’s. Now much of this appreciation is generated by the consumer and is being created on a daily basis. As Rolex fans and self made experts of vintage Rolex discover irregularities, similarities, movement calibers, or basically the dissection of entire lines from model year to model year, even from model quarter year to model quarter year, rarity and exclusivity is created and brought to light. Once an irregularity is found to be exclusive to a line or model and produced for a limited time, that watch is now in demand, once in demand the asking price goes up, once asking price goes up, exclusivity becomes even greater and a valuable vintage timepiece is born.
The good thing for the intelligent used Rolex buyer looking to buy for an investment is that Rolex, in general, will hold their value better than most any other timepiece, so at worst you can always get a good portion of your initial investment back if you decide to resell or trade. The bad thing is you can never know which model will appreciate faster or what characteristics will accelerate that value and at what rate. The reason why those in the know say “wearing a Rolex is the reward,” is simply because predicting what will become valuable in an ever evolving vintage market is extremely difficult, to down right impossible to predict. Quite ingenuously there are far too many variables.
There are so many variables and so little time, and time can be the predominant factor to seeing a return on investment in most cases. For many used Rolex models vintage status, demand, and exclusivity do not even begin until thirty years or older. What is considered rare is extremely hard to predict. What you can predict for a Rolex is it will never depreciate past a certain level. What level that is depends on the model and year. Once the individual Rolex hits that depreciation bottom from then on it starts to gain in value. Of course slowly at first until demand and exclusivity are determined and then it can sky rocket.
The variables of what can make a Rolex a sought after timepiece are incredible in their number. But the key to each variable is they existed for a limited amount of time and or they are very hard to find. Consider the rail dial on a 1979 Rolex Seadweller 1665. Considered a very rare dial the main attribute of its value is simply the spacing between the words “superlative chronometer officially certified” on the bottom of the dial. There is an even spacing down the center of those four words called a “rail”. That spacing has made that dial alone, in the realm of ten thousand dollars. Other variables can be the color of the font used on the dial, the font used, is feet listed before meters, what texture is on the dial, what luminosity was used, what shape are the hands, stick markers, Arabic numerals, holes in the case, type of crystal, patina, and on and on.
It seems daunting but for many the research and knowledge base is almost the entirety and the joy of owning a used Rolex. Forbes Magazine says there are two exceptions for watches as an investment, Rolex and Patek. There are a few reasons why a used Rolex is one of the few watches that can show a return on an investment. One, they have been one of the premier names in horology for decades. Second, they are very strict at controlling price which controls and or influences resale value. Third, they have been selling the same watch families or model names since their inception. This gives a great foundation and large pool of comparison and contrast for manufacturing variables, exclusivity, and rarity. Fourth, and perhaps more important, is the number and fervor of the used Rolex nation. There is no other watch following as passionately aware of the minutiae and details of collecting, promoting, and valuating timepieces than those that follow Rolex.
Investment is relative in the watch world, value is more concrete and few watch brands are both. Rolex is value. A used Rolex will retain value better than almost any other brand and in any market. Investment is another matter. Adherents of Rolex are absolutely correct when proclaiming you should buy a used Rolex for no other reason than you will love to wear it. But return on investment can not be doubted or marginalized by detractors. Rolex as an investment is a fact and can bring tremendous margins. However these margins in most cases will not be for the original buyers but rather those of the next generation they pass them to. Profit if any will be hard to predict from model to model but the fun is in the prediction. For Rolex the old adage that the value is in the journey not the finish may apply. Worst case scenario when buying a used Rolex for an investment is you wear one of the most coveted watches in the world and will eventually reclaim most of your investment. Best case scenario you do a little research, get a little luck, and wear one of the most coveted watches in the world and make a tidy to tremendous profit on its eventual resale. That sounds like a win, win scenario for most every watch enthusiast, especially those seeking a Rolex as an investment.