Rolex Appreciation Beat Other Investments Over Past Decade
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Rolex Appreciation Beat Other Investments Over Past Decade

Why invest in the stock market when you can invest in your wrist.

By Laurie Kahle
Wed, Feb 2, 2022 10:07amGrey Clock 3 min

With 10 years of sales data to draw from, the team at Bob’s Watches, an e-commerce retailer of pre-owned Rolexes and luxury watches, analysed how Rolex values have performed in the secondary market over the past decade compared to stocks, bonds, real estate, and gold. When the results came in, Rolex watches outperformed them all.

“We were surprised by how much the values have appreciated,” says Paul Altieri, founder and CEO of the California-based Bob’s Watches, during a recent interview, noting that few online sources have access to a full decade’s worth of sales data. “We were hoping to come up in the top three, so we were happy that it was number one.”

Evaluating percentage increases for gold and real estate, based on inflation-adjusted values for gold from macrotrends.net and median sales price data for houses sold in the U.S. from the Federal Reserve Economic Data (FRED) database, Rolex watches significantly outperformed both.

When it came to the Dow Jones Industrial Average, based on values from macrotrends.net, returns were comparable over the decade, but Rolex produced significantly higher appreciation percentages over the past five years.

According to the data, the average price of a used Rolex watch rose from less than US$5,000 in 2011 to more than US$13,000 by the end of last year. Intriguingly, the appreciation of Rolex watches since the beginning of the pandemic in early 2020 is nearly equal to the total price increase over the preceding five years.

“Demand is driving that, of course, inflation as well—but inflation only accounts for maybe 20%,” Altieri says. “The vast majority is overwhelming demand. Supply has been constrained and demand just keeps surging globally.”

He added that strong economic growth around the world, and particularly in China and elsewhere in Asia, over the past five years has also helped drive up values.

“Rolex has been a huge benefactor. I would say the same for Omega, Patek Philippe, and Breitling. A lot of brands have had tremendous success the last 10 years, especially the last five, and Rolex is certainly at the top of the list.”

Bob’s Watches also evaluated appreciation by Rolex model. Not surprisingly the brand’s purpose-built sport and tool watches account for eight of the top 15 reference numbers (including the top three positions). While the stainless-steel Submariner 16610 is the single best-selling Rolex reference over the past decade and its two-tone steel-and-gold sibling Ref. 16613 comes in second, Daytona is number one when it comes to the highest-appreciating model with an average pre-owned price topping US$30,000 last year.

“Daytona has always had a broader appeal, a stronger demand,” Altieri explained. “There is at least a five-year waitlist to purchase the new Daytona at retail. It’s a more complicated watch and it has always been a popular model with a higher value.”

As an example, he cites the Ref. 116500 Daytona with a white dial, which sells for around US$38,000 in the secondary market when the official retail price is about US$13,000. “That is the ultimate example of demand and supply being out of sync with each other,” he says.

To illustrate the dramatic shift that has taken place, he said that when Bob’s Watches entered the market in 2010, prices for pre-owned watches typically ran 25% to 40% below full retail in a store. Now, for some models, the pre-owned prices are dramatically higher than retail prices, because those new hot-ticket models are so hard to come by in a store.

Altieri points out that the imbalance has been growing over the last five to 10 years, and he doesn’t predict a correction any time soon. “I don’t see Rolex increasing production substantially to satisfy demand, so quantity will remain limited,” he says, adding that Omega is also surging in demand with unit sales almost doubling last year compared to 2020.

“Watches as a category are really popular today and growing,” he says. “Barring some major recession, I don’t think you will see any change. I know it seems unsustainable, like a bubble, but I just don’t see it changing.”

Reprinted by permission of Penta. Copyright 2021 Dow Jones & Company. Inc. All Rights Reserved Worldwide. Original date of publication: February 1, 2022.



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The Knight Frank Luxury Investment Index reveals investments of passion are paying strong dividends, in some areas at least

By Bronwyn Allen
Tue, Apr 9, 2024 4 min

Art was the investment of passion that gained the most in value in 2023, according to Knight Frank’s Luxury Investment Index (KFLII). This is the second consecutive year that art has risen the most among the 10 popular investments tracked by the index, up 11 percent in 2023 and 29 percent in 2022. Art was followed by 8 percent growth in jewellery, 5 percent growth in watches, 4 percent growth in coins and 2 percent growth in coloured diamonds last year.

The weakest performers were rare whisky bottles, which lost nine percent of their value, classic cars down six percent and designer handbags down four percent. Luxury collectables are typically held by ultra-high-net-worth individuals (UHNWIs) who have a net worth of US$30 million or more. Knight Frank research shows 20 percent of UHNWI investment asset portfolios are allocated to collectables.

In 2023, the KFLII fell for only the second time, with prices down 1 percent on average.

Despite record-breaking individual sales in 2023, a surge in financial market returns contributed to a shift in allocations impacting on luxury asset value,” the report said. “… our assessment reveals a need for an ever more discerning approach from investors, with significant volatility by sub-market.

Sebastian Duthy of AMR said the 2023 art auction year began with notable sales including a record price for a Bronzino piece. But confidence waned as the year went on.

“It was telling that in May, Sotheby’s inserted one of its top Old Master lots – a Rubens’ portrait – into a 20th Century Modern evening sale. But by then, it was clear that the confidence among sellers, set by the previous year’s record-busting figures, was ebbing away. In the same month, modern and contemporary works from the collection of the late financier Gerald Fineberg sold well below pre-auction estimates.”

The value of ultra contemporary or red-chip’ art contracted the most in 2023.

“Works by a growing group of artists born after 1980 have been heavily promoted by mega galleries and auction houses in recent years. With freshly painted works in excess of £100,000 almost doubling in 2022, it was little surprise that this sector was one of the biggest casualties last year. There is a risk there are now simply too many fresh paint artists with none really standing out.”

In the jewellery market, Mr Duthy noted that demand was strongest for coloured gemstones of exceptional quality, iconic signed period jewels, single-owner collections, and items with historic provenance in 2023. In the watches market, Mr Duthy said collectors chased the most iconic and rare timepieces.

A Rolex John Player Special broke the model record when it sold for £2 million at Sotheby’s in May, double the price for a similar example sold at Phillips in 2021,” he said.

Although whisky was the worst-performing collectable in 2023, it has delivered the highest return on investment among the 10 items tracked by the index over the past decade, up 280 percent. Andy Simpson of Simpson Reserved, said 2023 was a challenging year but the best of the best bottles gained 20 percent in value. In my opinion some bottles that lost significant value in 2023 will return through the next two years as they are simply so scarce and, right now at least, so undervalued, Mr Simpson said.

Whisky was the worst performing collectable in 2023 but it had highest return on investment over a 10-year period. Image: Shutterstock

Classic car expert Dietrich Hatlapa said the 6 percent fall in collectable vehicle values in 2023 followed a 22 percent surge in 2022. The strong performance of other investment classes such as equities may have dampened collectors’ appetites it’s a very small market so it only takes a minor change in portfolio allocations to have an effect, and there has also probably been a degree of profit taking. However, we have seen some marques like BMW (up 9 percent in value) and Lamborghini (up 18 percent), which appeal to a younger breed of collector, buck the trend in 2023.”

Mr Duthy said a dip in the share price of the top luxury handbag brands last Autumn appeared to spook investors. Last autumn it was possible to pick up an Hermès white Niloticus Himalaya Birkin in good condition for under £50,000. The recent slide reflects a general correction at the upper end that’s been underway for some time rather than changing attitudes to the harvesting of exotic skins.

According to Knight Frank’s Attitudes Survey, the top five investments of passion among Australian UHNWIs are classic cars, art and wine. Fine wine values gained just 1 percent in 2023 as the market continued its correction, said Nick Martin of Wine Owners. “It’s been a hell of a long run, so I’m not that surprised. Some wines from very small producers that had enjoyed the most exuberant growth have seen the biggest drops. It had got a bit silly, £50 bottles had shot up to £200 or £300.”

Favourite investments of passion: Australia vs Global

1. Classic cars (61 percent of Australian UHNWIs vs 38 percent of global UHNWIs)
2. Art (58 percent vs 48 percent)
3. Wine (48 percent vs 35 percent)
4. Watches (42 percent vs 42 percent)
5. Jewellery (18 percent vs 28 percent)

Best returns among investments of passion (10 years)

1. Whisky 280 percent
2. Wine 146 percent
3. Watches 138 percent
4. Art 105 percent
5. Cars 82 percent

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