Times of financial crises, like the current high inflation rates and signs of a looming recession, turn the stock market upside down.
Virtual investments lose popularity while people look for more stable and haptic types of investments.
What determines the worth of a luxury item, like high-quality Rolex watches, and how can we use them to secure and increase our capital?
Rolex watches
Rolex is one of the world’s most famous names when it comes to watch manufacturers and is easily recognized in countless locations as a synonym for luxury, precision, and prestige.
The British-founded Swiss watch brand is a prime example of the one-of-a-kind monopoly Switzerland has when it comes to the reputation of creating the best and most precise timepieces.
Dating back to the beginning of the 20th century, being founded in 1905, the manufacturer has a long history of trailblazing innovations in watch technology, production quality, and the use of high-value materials.
The most popular Rolex models have become the leading examples in their categories.
The Rolex Submariner, for example, is the quintessential diving watch, despite not being the first of its kind.
Many watch models today have adapted the two-tone 24-hour ring first popularized by the Rolex GMT Master.
What makes luxury watches an investment opportunity?
Several factors have turned luxury watches like Rolex into investment opportunities. These include:
- Tradition & Expertise
Rolex watches tell more than time. They were created by manufacturers who have centuries of experience in designing and producing watches.
Swiss watchmakers have developed the reputation to be especially precise and high-quality for good reason.
Similar to the value of a painting – being much more than the material value of the paints and canvas – here, the expertise and many years of learning the trade are part of what makes a Rolex so special.
- Limited Editions
To provide their clients with the highest quality, the luxury editions of Rolex watches are hand manufactured.
This manual process takes a lot of time and trained individuals. As a result, the number of watches produced for a specific luxury watch model is very limited.
- Growing Scarcity
These small numbers of limited luxury watches already set them up for high demand.
Over time, the scarcity of some Rolex watches of good quality rises more and more. The harder it is to find a specific Rolex in a good condition, the more are collectors willing to pay for it.
- High-quality Materials
Rolex has developed many watch technologies and materials that create long-living and efficient timepieces.
Furthermore, many luxury editions are created with decorative yet functional materials with high values. Gold and diamonds are not uncommon when it comes to high-end wristwatches.
- Luxury & Status Symbols
The small numbers, high prices, and high-quality provided by the expertise and tradition of Rolex as a watch manufacturer have led to their high-end models turning into luxury and status symbols.
Rolex watches that were built by hand are expensive. Therefore, people who wear them signal their wealth and success.
Thus, the watches have become more valuable than the worth of their materials and production alone.
Examples of successful luxury Rolex investments
The most famous increase in capital made from selling a Rolex watch is tied to a Rolex Daytona.
In this special case, it is a watch that belonged to Hollywood star Paul Newman.
The Daytona he wore during the filming of “Winning” was a gift from his wife, Joanne Woodward, with an engraving of “Drive Carefully Me” to keep him safe during racing scenes.
At the time, the retail price of a Rolex Daytona was about $200. This specific piece was last sold for 17.8 million US-Dollar in 2017.
In terms of the retail price, the most expensive watch produced by the Rolex factory is the Rolex GMT Master II Ice with a retail price of $485,350.
On online markets for luxury watches, you can easily find GMT Master II models for as much as $850,000.
The most successful stories about investments in luxury Rolex watches are hard to replicate, but they signal the chances one can have when getting their hands on the right items.
Even fewer spectacular sales can lead to values much higher than the original retail price.
For example, adjusted for inflation, a Rolex Submariner’s retail price in 1957 would be worth $1,581 today.
However, current prices on marketplaces start at least at $3,000 and reach up to $400,000.
Making the right Rolex investments
To make the right investments, you need to have the appropriate background knowledge.
- Collectors’ marketplaces on the internet are great platforms to figure out which kind of watch is in high demand or most likely to rise in value over time.
- Statistics that show the increase in market value for specific Rolex watches are another helpful resource.
Conclusion
Collectors‘ items, like luxury watches, have a growing interest, even during financial crises.
As time passes, the gap between supply and demand increases.
If you put in the right amount of research and find promising models, you can buy a Rolex and other luxury watches for a comparatively small price and watch its value rise over the years.
In the unlikely case that the demand for a specific watch decreases you still own a haptic item with material worth, as most luxury watches are made from high-quality materials and intricate technology.
This eliminates the risk of total losses and makes luxury watches a great way to diversify your investment portfolio.
