Investing in collectibles is a great way to diversify your portfolio, and can be very profitable. Collectibles are items that you buy with the intention of making money down the line – not on day one. You may be wondering what makes them valuable? Well, collectibles have value because they are rare or hard to find. Things like baseball cards or fine art are examples of collectibles that many people invest in for their future value. In this post we will discuss different types of collectibles, methods for investing in them, expected returns, and more!
What is a collectible?
A collectible is an item that you believe will increase in value in the future – not on day one. Collectibles have value because they are rare or because of the content on the card. Whether there is a legend on the card or it is a first edition, collectors have many reasons to predict a rise in price. Many objects like baseball cards, stamps, and fine art are examples of collectibles that many people invest in for their future value. Investing in these items can be a good way to diversify your portfolio and make some great returns!
What benefits come with investing in collectibles?
Collectible investing offers many benefits
- Collectibles are easy to store and transport – you don’t need a big warehouse. In some instances, a management company can store your collectibles if you are worried about them getting damaged over the years.
- It’s fun and exciting.
- They offer the opportunity for appreciation, especially if they are in mint condition or have significant age.
- Collectibles are a way to diversify investments.
- Many collectible investors find the risk of investing in these items is low because they can be better predicted than other types of investments like stocks and bonds.
- The vast majority (about 85%) of people invest in collectibles just for fun.
Investing in collectibles can be very satisfying because it is tangible and you can take pride (and sometimes great joy) from ownership, which will likely never happen with your investment portfolio.
Types of collectibles you can invest in.
The list of collectibles is vast and ever-expanding ranging from:
Antiques can be defined as anything over 100 years old. The older and rarer usually the higher the value. People have collected antiques for all millennia. Antiques are very unique because of how broad they are. Antiques can be anything from furniture, silverware, and more.
It’s not uncommon for someone to sell an antique from their attic for over a million dollars. Prices and sales vary though largely depending on what you are selling, and what someone is willing to pay for it. But if there is a market for it, it can be sold.
Antique investing is a great way to diversify your portfolio, and it’s also an easy way for beginners to start building their wealth by buying low-cost pieces that they can resell later in the future when prices have gone up even more.
The baseball card market has exploded since the 1980s. Baseball cards can be valuable if they are rare and in good condition – it’s not unusual for a baseball card in mint condition from the early 1900s to be sold at auction for $100,000 or more.
Now would be a good time to check that old shoebox in your closet full of cards because you just might make money with an old card collection that happens to be worth a million bucks. The market for sports memorabilia has never been hotter and baseball cards are some of the most popular types. Millions of dollars worth of memorabilia is traded every year.
Don’t have a shoebox full of cards? You can build your sports memorabilia collection with Rally!
Trading cards could be a great investment and could be something you have lying around from when you were a kid. Some popular trading cards are Pokemon and Yu-Gi-Oh! Pokemon cards have been seen to recently be priced at over $100,000. Who knows, you may have a fortune in trading cards you used to collect in your basement covered in dust.
Books are valuable if they are old and rare these include inscribed copies, first editions, or signed works. Book values are largely dependent on their condition. Many collectors are interested in a book’s paper quality, binding style, and cover material.
Interest in books has been around since the invention of writing, with early collectors paying top dollar for hand-written copies.
Those who are interested in being a collector of rare books should look at auctions and dealers that specialize in this type of collectible because they will have access to a wider variety than what is available on Amazon or at your local bookstore.
Comic books can be worth a lot of money if they are rare and in good condition. Many people enjoy collecting these as a form of nostalgia because it brings back memories from their childhood. Vintage copies have sold for well over 1 million and more. A key element to determining how much a comic book is worth is the condition a book is in. The rarer the comic, and in better condition it is, the higher its potential value.
Art is a broad category that includes paintings, sculptures, and other types of visual works. Fine art has been collected for centuries. Some of the most valuable paintings have sold at auction for nearly a billion dollars. Collectors of fine art can be quite obsessive about the artist they collect, in some instances acquiring entire collections of 1 artist work. The art market can be volatile, but that is what attracts many collectors. Art can also be digital in the form of NFTs.
Video games are adored by collectors for many reasons. Some collectors love the challenge of finding and preserving rare games. Others enjoy sharing their favorite video game memories with others by collecting them for posterity. Older, rarer, or more popular video games can fetch a higher price. Some examples of coveted video games are Doom, SuperMario, Halo, and Call of Duty.
There are a few factors that play into how much money you can make from your collection: rarity, condition, and demand. Rarity is often out of your control as it depends on the total supply of the game. Might be time to clean out your drawer and list your video games for sale.
Vintage wines are sought after for their age and rarity. They have a value that can increase over time because of how well and when they were made, where in the world they come from, or who makes them. You might find an old bottle of wine hidden away in your grandparents’ basement worth hundreds to thousands of dollars!
Some collectors choose to get into it with no initial investment but by buying one vintage wine at a time. However, others will start off by purchasing cases to amass as much inventory as possible before reselling what doesn’t sell through online auction sites such as eBay or Amazon.
A potential downside could be having limited space available if you take this route- though we all know there is never enough room in your home for fine wine. Fine wine also has to be stored at a specific temperature to maintain quality. A great way to invest in fine wine is through Vinovest.
Classic automobiles are a type of collectible that can be more than just an investment. They also provide the opportunity to enjoy your collection while driving them on sunny days and taking in the scenery with friends or family.
For some, these cars inspire their creativity as they take pictures for magazines such as Hemmings Motor News or Cars & Coffee Magazine. For others, it is about showing them off at car shows where other enthusiasts will come together to share knowledge and ideas on what makes each vehicle special to its owner from the body style, engine power, fuel efficiency, manufacturer’s history, etc.
There are many resources available online either through forums (such as Corvette Forum) which foster discussions among collectors who trade tips and knowledge on investing in classic automobiles.
Watches are an interesting investment opportunity for many reasons.
- They are ‘timeless’ pieces of jewelry that can be passed down through generations and still remain in use.
- Most vintage timepieces hold their value for many years – sometimes decades or centuries.
- The watch industry is highly regulated to ensure quality standards and legibility which provides lower risk than art where authenticity may not be as guaranteed.
Watches made from precious metals, such as gold or platinum, will often increase in value over time and many people view them as a better long-term investment than traditional assets such as stocks and real estate. Big watch brands such as Rolex also tend to appreciate in value overtime. Collecting these types of watches is also less risky since the resale market for this type of item is fairly broad. Watch trading has been around for decades, but it has seen a resurgence in recent years thanks to the internet. They do say time is your most valuable asset.
These are just a few examples. There are many types of collectibles you can invest in, both new and old.
Collectible investing can be a good way to diversify your portfolio and complete your financial picture, and of course, it doesn’t have the same level of risk as other types of investments. However, like any investment, there are risks involved so you want to develop an exit strategy before venturing into this asset class. You should also research different collectibles thoroughly beforehand. StockX is a trustworthy site to buy rolexes on the secondary market.
How to invest in collectibles?
There is a multitude of ways you can go about investing in collectibles, the opportunities are endless, and the market is expanding rapidly. Everyone’s financial situation is different and so are their wants, needs, and desires. Figuring out what type of collectible you’re interested in will help establish where to start investing.
Focusing on one category can be a great way to take things slow if this is your first foray into the world of
Of course, you can buy and list items individually or collectively on an auction site such as eBay, you could search for dealers, or you could leverage one of the investment firms in our investment marketplace such as Rally or Otis to amass your collection.
What you need to know before investing in collectibles!
If you’re thinking about investing in collectibles, there are a few things to keep in mind. How to value them as well as the investment risks.
1. Valuing an item is not always easy.
Collectibles are not like stocks or bonds, so they don’t carry the same liquidity. You can expect to see a range of valuations on eBay and various marketplaces for an item that’s in decent condition but interest varies from platform to platform.
There are a plethora of ways to value a collectible.
- Whether or not it’s officially licensed by a company and how many copies exist.
A consideration to make when using this list is that all three are relative to each other. For example, an item may be worth a lot because it’s rare and in excellent condition. But on the other hand, if there are only one or two copies of that item around, then even something with a low price could have significant value.
- Contact a dealer who could give you a valuation
As a collector, this is the best way to know what your investment is worth. Researching as much data as possible about the origins of your collectible is very important.
2. There are many secondary costs.
The secondary costs of owning collectibles are staggering. You’ll have to pay for the handling, storage, and insurance related to your pieces, as well as any restoration or maintenance fees that might come up over time. Usually collectibles are held for a long time.
If you purchase very expensive items then it is wise to consider getting them appraised too; these additional expenses will be a part of the life cycle cost associated with collecting valuable artworks and other prized possessions. If possible, also look into getting your collectibles graded by an official grading company. This will help if you plan to place it for sale someday.
Platforms usually charge management fees which can add up substantially. Not to mention, shipping costs which can be very expensive if you buy or sell internationally and get insurance on your item. It may be wise to look into shipping options that cater to fragile items if need be.
If all of the above sounds like a lot to take on, then investing in physical collectibles may not be for you
It’s worth researching as much data as possible about the origins of your collectible before purchasing anything because knowledge can give peace of mind to an investor.
3. Collectibles tend to be illiquid
Collectibles are not typically liquid investments, meaning that you can’t sell them quickly. There isn’t necessarily a stock market for collectibles. You can look at selling collectibles much like you would real estate.
If you need to access the money in your collection for some reason then it will be difficult because of this illiquidity; however, since collectibles tend to grow over time due to scarcity (and oftentimes also due to increased demand) then this can be seen as a fair trade-off.
Collectibles should not be your primary investment and you shouldn’t invest the majority of your portfolio in them, but they make for an excellent alternative investment that will certainly diversify your portfolio.
4. Other Risks
There are a number of considerations to take into account when you invest in collectibles. These include the idea that markets can be unpredictable and volatile, or they may not always go your way. Collectibles are also subject to changes in fashion and taste which will have an impact on their value. Trends play a major role in if you sell a collectible for millions one day or get pennies for it the next.
The following points are some important considerations you should make before investing in collectibles:
- Collectible Investing is not your primary investment and so it should be a minority portion of your portfolio
- You may lose money if there’s an unforeseen market decline or change in taste
- You should have a diversified portfolio of collectible investments (art, sports card, memorabilia, antiques, etc.)
- Investing in alternative assets is not the same as investing in the stock market
- If you’re looking to purchase single pieces rather than full sets it’s better to buy them at auction or from dealers who specializes in that type of collectible.