Daily Gains Letter

investing in collectibles


Investing in These Collectibles a Better Bet Than Wall Street?

By for Daily Gains Letter | Nov 25, 2013

Investing in These CollectiblesNot all investing opportunities are created equal…

Thanks to Antiques Roadshow and American Pickers, everyone thinks investing in collectibles is a great idea. However, the truth is that few actually have anything worth more than the day they were first purchased.

That doesn’t prevent people from trying to guess what the next great cultural commodity is going to be. I remember (briefly) watching a home shopping channel years ago and listening to someone explain why “Beanie Babies” were the next big thing for those interested in investing in collectibles. He couldn’t guarantee they were a slam-dunk investment, but the prices on the secondary market had soared. Take that into consideration as you call in your order.

Interestingly, there is no Beanie Baby segment on any home shopping channel today.

Unlike stocks, there is no discernable way to say why, when, or if a collectible will ever increase in price; they also don’t provide a dividend. Investing in collectibles is as difficult as trying to time the stock market—it’s virtually impossible.

Collectibles can also be difficult to value, as it’s a subjective art. For example, on eBay (NASDAQ/EBAY), you can purchase a rare Princess Diana Beanie Baby bear for either $400,000 or get one from the same edition in similar condition for just $5,000. That’s quite a discrepancy for a really small target audience.

Here’s a hint: when it comes to investing in collectibles, look for the lowest-selling collectible you want, as that’s the bottom basement price no one is willing to pay. I’m not picking on Beanie Babies, I’m just using them as an example.

Investing in collectibles isn’t exactly … Read More