Invest in Gold…Buy A Rolex?

Investing in gold has become impersonal.  You dont even need to buy physical gold anymore (such as coins), an ETF such as GLD offers the ability to own gold without taking possession of it.

Investing in gold has been a hedge against stocks and the dollar for a long time. The same goes for silver (its equivalent ETF is: SLV).

Another way to own gold is to buy a signed piece of gold jewelry, such as from Cartier or Tiffanys. In addition to owning gold, you can enjoy it even more, than say, owning gold coins. I also find this a lot more enticing of an idea than putting more money into a gold investment that you cant really get a hold of. I dont see this as a large portfolio addition but as a small part to be used as a diversification method. Not all of my investing money, just some of it.

There arent as many choices for men in this area than there are for women. The most acceptable jewelry selection for men is to buy a gold watch, and the most popular in this regard is a Rolex watch. Rolex not only sells gold watches but they have convinced men to buy watches with diamonds as well most watches for men rarely offer diamonds.

Heres why a Rolex is a good choice

• Liquidity You can buy other fine luxury watches, but Rolex watches have a lot of liquidity there is a very healthy after market for them.
• Opportunity for Appreciation — Some models will actually appreciate in value and provide a real rate of return. This is difficult to predict of course and you shouldnt count on it.
• Terminal Value More common models will depreciate to a point and then no more. A new gold Rolex president sells for about $22,000 (UPDATE: 2011: $28,000) A 25 year old model will sell for $ 7000-8000 (UPDATE: 2011: $9,000 $9,500) It is unlikely to depreciate further.
• Its a Watch! A good one at that it doesnt need a battery.
• Timeless Design — the classic Rolexs have not really changed that much and still look great today. Part of the reason why they hold their value is that they maintain a classic look throughout their history.

Which One Should I Buy?

There are many different watches to choose from, some are made of all gold or all platinum, plus models that have some precious metal with stainless steel. Also, they are sometimes offered with precious stones (diamonds, sapphires, rubies and emeralds), usually the womans models.

The best choice as an investment is the Mens Gold Rolex Day-Date (commonly referred to as the President). This watch is very popular and is offered at a lower price than other full gold models in the Rolex lineup. Also, there is an almost 40 year product history with the 18K model. Heres a quick summary of the different models over the years and how much they sell for in the aftermarket.