The question started coming in around 2015. Not from watch collectors — from people who’d never worn a Rolex in their life. Financial advisors, real estate investors, a few hedge fund guys. They wanted to know if the secondary market premium on certain references was sustainable, whether buying pre-owned made sense as a store of value, and which watches had the strongest track record.

I told them what I tell everyone: the investment story is real, but it’s more specific than the headlines make it sound. Not all Rolex watches appreciate. Not all entry points are equal. And the transaction costs in this market eat returns faster than most people expect.

Twenty-five years of buying and selling pre-owned Rolex watches teaches you things that no analyst report covers. Here’s what I’ve actually observed.

The References That Have Performed

Three watches have shown the most consistent appreciation over the past decade: the steel Daytona, the GMT-Master II Pepsi, and to a lesser degree the green-bezel Submariner.

The Daytona is the clearest case. It retails at $16,550. Pre-owned in honest condition it trades at $27,000 to $36,000. That gap has existed for over ten years. The reason isn’t mysterious: Rolex doesn’t make enough of them to meet demand at authorized dealers, and the secondary market prices the scarcity. I’ve watched that premium persist through market corrections, through the 2020 slowdown, through the 2023 correction from the post-pandemic peak. It compresses and expands but it doesn’t close.

The Pepsi GMT is a more recent story. When Rolex reintroduced the red/blue bezel on the 126710BLRO in 2018, it retailed around $9,700. Today it retails at $12,750 and trades pre-owned between $14,000 and $19,000 for clean examples. The Jubilee bracelet version commands the top of that range. Buyers who got in early have done well. Buyers who paid peak 2022 prices are roughly flat.

The Submariner is different. It’s not an appreciation story in the same way — it trades at or slightly above retail on current references. What it offers is liquidity. A clean Submariner in our inventory moves in days. As a store of value you can access quickly, it’s the most practical choice in the lineup.

What Most People Get Wrong

They buy the wrong reference. Plenty of Rolex watches trade below retail pre-owned, including some beautiful ones. The Oyster Perpetual, the Air-King, the Datejust in standard steel configurations — these are watches I’d recommend to anyone who wants to wear one. As investments, they’re flat at best.

The second mistake is buying at the wrong point in the cycle. The pre-owned Rolex market peaked hard in 2021 and early 2022. Speculative buyers pushed the Submariner above $15,000. I had clients call me excited about “returns” on watches they’d bought six months earlier. I told them to enjoy the watches because markets correct, and this one did. By 2023 the Submariner was back below $12,000. The buyers who held through the cycle are fine. The ones who needed to sell in 2023 took losses.

Third mistake: ignoring transaction costs. Buying from a dealer means paying a margin. Selling means accepting a discount. Round-trip, you’re looking at 15 to 25 percent in friction. A watch needs to appreciate meaningfully before you break even on a trade. This is not a short-term play.

The Honest Comparison to Other Assets

Over ten years, a steel Daytona bought at reasonable pre-owned prices in 2015 has returned 125 to 200 percent. The S&P 500 returned roughly 185 percent with dividends over the same period. It’s closer than the watch industry marketing suggests.

What Rolex offers that an index fund doesn’t: no correlation to equity markets, a physical asset with collector demand as its floor, and something you can wear while it appreciates. What it doesn’t offer: liquidity on demand, divisibility, or the ability to dollar-cost average in small amounts.

The clients who’ve done best with watches in their portfolios treated them as 2 to 5 percent of overall holdings — a diversifier, not a primary position. The ones who went heavier based on 2021 returns learned an uncomfortable lesson about alternative assets at cycle peaks.

What I Tell People Now

Buy the watch you want to own. If it happens to be a Daytona or a Pepsi GMT, the investment case supports the purchase. If it’s an Oyster Perpetual because you love how it looks, buy it and enjoy it — just don’t model returns into your retirement plan.

The watches that have appreciated most consistently are the ones that genuine collectors want most. That’s not a coincidence. The investment value of any Rolex is ultimately downstream of its desirability, and desirability isn’t something you can model. You can only observe it over time — which is what 25 years in this market gives you.

The author is a pre-owned Rolex specialist at Ermitage Jewelers, an independent dealer operating since 2000.