Rolex Watches Are a Symbol of Luxury. They’re Also a Budding Asset Class.

From Sea to Sky

For decades, Rolex watches have been promoted via sponsorships as a symbol of excellence, luxury, and the extraordinary. Since the early part of the twentieth century, the timepieces have been prominently positioned on the arms of athletes who achieved acts of greatness, such as swimming the frigid English Channel or climbing Mount Everest. Both athlete and wristwatch persevered in the face of harsh conditions.

This form of promotion and the ensuing brand awareness has given Rolex an enviable distinction in the industry, setting it apart from its peers.

Scarcity and Speculation

Rolex watches have always commanded a high price point. For years they’ve been nearly impossible to buy brand new due to insufficient supply, transforming them into a sort of alternative asset class. As they are sought out by investors, prices on the secondary market are being pushed higher and higher.

The company is owned by the Hans Wilsdorf Foundation, a Swiss charitable trust. Profits take a backseat to slow and deliberate production objectives.

Timing the Market

On the secondary market, Rolex watches trade for upwards of $15,000, about three times higher than prices observed in 2011. Some market observers fear that valuations have gotten out of hand and may not be sustainable. The market has weakened in recent months.

Would-be buyers who are looking for portfolio diversification may want to evaluate the luxury watch play in the context of other alternative asset options. Those who feel an affinity for what the watch represents may just want to wear one, provided they can pay the price.

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James Flippin ABOUT James Flippin James Flippin is the son of a financial advisor who grew up hearing and learning about bond yields, interest rates, the stock market, and the ins and outs of Wall Street. After stints as a licensing and business broker for Marcus and Millichap in New York City, James moved into broadcasting and became a reporter and anchor. He covered crime, politics, finance, and tech at NBC News Radio while working part-time as a producer for SiriusXM. James graduated from the University of Delaware with a bachelor’s degree in political science and economics. He's also an accomplished podcaster with over 10-years of experience.

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