For the past few years, the stock market has been relatively volatile, which is likely why alternative investing has skyrocketed in popularity. From investments in cryptocurrencies to wine, many Americans are opting to move away from the stock market and towards investment options that better fit their goals. Interestingly, one of the least discussed but most rewarding options for diversifying one’s portfolio has yet to become mainstream: watch investing. And of all the watches available for you to invest in, the Rolex Daytona seems to be the most accessible and valuable option on the market today. Of course, to see true returns on your investment, it matters which watches you choose to invest in as not all watches offer the same level of Return On Investment (ROI). In other words, don’t expect your Casio to steadily increase its initial value by 10% each year, but certain reputable watchmakers, such as Rolex, Audemar Piguet, and Patek Philippe, are almost guaranteed to increase in value over time. In this article, we will explore how the Rolex Daytona has consistently beaten the stock market and provided investors with ROIs of up to 34% in one year alone.
What are the Differences Between Stock Market Investing and Investing in Rolex
When investing in the stock market, you are essentially purchasing a share of a publicly traded company. As the company increases in value, so do your shares until you eventually sell them to the next investor. Sometimes, depending on the company, you will receive dividends, which are re-distributions of a company’s net income during that fiscal month, quarter, or year.
Investing in the stock market carries the same risks as any other options. For starters, if the company you choose to invest in does poorly, your investments can substantially decrease in value. On top of this, there is no guarantee of dividend payments; a company can choose not to distribute dividends, and there is nothing that you can do to change that. Lastly, particularly in the current volatile market, the value of stocks can change rapidly on a day-to-day basis. In 2020, for instance, the stock market had one of its worst years ever, plummeting due to Covid-19 concerns; the following year, the stock market had one of its best years due to its rebound from its previous dip.
Because of these sudden changes, the stock market has become unfit for certain investors’ goals, leading to a sharp increase in nontraditional investments. The Rolex Daytona, for instance, goes for approximately thirty to forty thousand dollars. Although the price may initially seem steep, if you are debating whether to invest in the stock market, it is important to realize that you would likely end up investing the same amount of money in the stock market too, particularly if you wanted to see any significant ROI.
In 2021, the S&P 500—a widely used benchmark for the stock market—grew approximately 26.9%, whereas the Rolex Daytona saw a 36.2% increase in value. Additionally, the Rolex Daytona has an average annual growth rate, which can be used to predict future growth rates, of 34%. The S&P 500, on the other hand, has had an average annual growth rate of 13.6%.
Why are Rolex Timepieces Doing so Well?
The largest contributor to Rolex’s promise as an investment opportunity lies in its limited supply, which leads to a relative increase in demand. On average, Rolex produces 800,000 watches each year, and with each produced by hand, it is unlikely that Rolex will be scaling its production any time soon. The current demand for their watches has almost always exceeded the supply, and as more people become interested in these watches, the price increases.
Other Rolex Investments Options
Although the Rolex Daytona is a popular and excellent investment choice, it is far from the only investment option the average investor has access to. On average, the Rolex Day-Date has an average six month growth rate of 22.2%, making it another excellent investment choice. Other watch brands that offer impressive ROIs include Patek Phillippes (average six month ROI is 24.2%), Audemar Piguets (average six month ROI is 31.2%), and Vacheron Constantin (average six month ROI is 17.5%).
Crypto versus Rolex
Nowadays, no investment discussion is complete without mentioning Cryptocurrencies. Despite Cryptocurrencies’ recent insurgence into the realm of investment options, most serious investors would probably be better off waiting to invest in them. Over the past few years, they have proved to be unstable and are subject to sudden drops in value depending on what celebrities tweet that day. Beyond this, cryptocurrencies are intangible, abstract investments that have little backing them beyond public perception.
Contrarily, watch investments take advantage of a multibillion dollar industry with centuries of combined experience from the brands that produce these horological masterpieces. No one individual controls the watch market, which leads to a more constant and predictable level of growth. Cryptocurrencies simply lack the history and stability of consistent ROIs that are necessary to prove themselves as worthy investment options.
Ultimately, there is no better time to invest than now. Recently, a wealth of alternative investment options have become available to investors alongside traditional stock market investing, and it can feel overwhelming. However, the watch market is often an overlooked option that has the potential to bring massive returns on your initial investment. Currently the Rolex Daytona is one of the most popular watch investments, but as a future watch investor, there is a wide variety of other watches that also traditionally outperform the stock market. Regardless of how you choose to break into watch investing, we at the Watch Investor wish you the best of luck.