What would I choose? I rarely wear a watch. I depend on my cellphone to tell time. The only time I wear (rather use) a watch is when I travel out of the country where I do not have phone access. A diamond pendant, however, will get more use. Therefore, my choice would be a diamond pendant, but must be with an ideal cut diamond.
Both Rolex and diamond pendant will lose value over time, because money invested in stock mutual funds will far exceed the price appreciation of the accessories. However, between the two, I would say the diamond pendant, if ideal cut per AGS or GIA certification, will hold value better, and is easier to resell (or repurpose). Furthermore, a Rolex requires high price periodic maintenance (otherwise will have damage). Therefore, in terms of cost/value, a maintenance-free diamond pendant is much better than Rolex. Of course, a so-so cut (short of AGS ideal or GIA excellent) diamond, especially most non-certified diamonds, will be much harder to resell than an old Rolex watch. Make sure you get a well cut AGS or GIA certified diamond, clarity Si1 or better and color I or better. Carat weight (size) will depend on your budget.