Collectibles as an Investment

Written by traderchris on . Posted in Uncategorized

People collect all sorts of things. I’ve seen doll collections, Hummel collections, sewing machine collections, mahjong collections and porcelain Collie collections, just to name a few. People often spend thousands of dollars and years growing their collections, only to find out that the value for most items tends to decrease over time. So how do you put together a collection that is more likely to appreciate in value over time and get the most bang for your buck when it’s time to sell?

  1. Buy the best that you can afford. In the beginning, quantity may take priority over quality, just to fill up your shelves. However, the best collections are carefully cultivated, with top specimens often taking years to acquire either due to cost or scarcity. As your budget permits, buy the best examples that you can afford, as you might not get another chance for a long time.
  1. Trade up. After a while, many serious collectors may find themselves with duplicates or less than ideal examples in their collections. When the opportunity is available, try trading-up some of the less desirable specimens for better quality ones. In fields such a coin or sports card collecting, sometimes a minor improvement in a single item can increase the value of your collection by thousands or tens of thousands of dollars.
  1. Keep an eye on the collectibles market. Just like the stock market, the market for collectibles can experience ups and downs. What may have been valuable years ago may only be worth a fraction of the value now (and vice versa if you’re fortunate…) Published identification guides often include price sheets, but they tend to become out-of-date very quickly unless the publication is only 1-2 years old. It’s best to use recent prices realized on eBay and auction house websites as a reference for the value of you collection, as they will more accurately reflect current pricing trends.
  1. Follow the golden rule of collecting. Collect what you enjoy and enjoy what you collect. If you find that this mantra is no longer true, it’s either time to downsize or sell your collection.
  1. Don’t burden friends or family with your collection. Unless they share the same passion for the items that you collected, most people are not terribly excited at the prospect of inheriting a collection, even if it’s valuable. Storing and insuring it can involve a great deal of time and money and selling it can be even more of a hassle, especially if they are in a time crunch to clear out an estate or storage unit.

If your intended recipient(s) would find the sales proceeds more beneficial than the owning the collection, take some time to find a reputable dealer or seller that can get you the best prices for your items. To make things easier, be sure to maintain an inventory of your collection with notes such as value and provenance, which can be very helpful when it’s time to sell.

 

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