My husband started buying Lord of the Rings action figures after the first movie came out, purchasing them a little at a time. He also has a box full of sports trading cards. A few of them are even worth something. We don’t exactly think of the action figures and sports cards as investments, but if we were in a pinch and needed the cash, we could sell them — and even possibly profit. Of course, the chance you take when investing in collectibles is that they may not be worth as much as you think they will be. In some cases, a collectible might decrease in value, depending on a number of factors.
Photo via Wikimedia Commons
Part of the problem with using collectibles as investments is that the value is subjective. To some degree, all investments have subjective values, of course, but many other investments also have some sort of underlying revenue stream. Additionally, many other investments are more liquid. They can be converted to cash quicker and easier than trying to sell a collectible. If you are interested in collectibles, here are some things to think about in terms of what makes them valuable (this is also important to remember when investing in anything):
No matter the collectible, it is possible to find places to buy and sell. You can start on sites like eBay to get a feel for what’s out there, but if you are really serious about high end collectibles, you may need to frequent specific auctions and look for shops, experts and gatherings that specialize in the collectibles you are interested in. You can also look at yard sales, pawn shops and consignment shops. If you know what you are looking for, you might be able to find a real bargain when you buy from someone who doesn’t know what he or she has.
The key, of course, is knowing what to look for. Warren Buffett famously suggested that you shouldn’t invest in anything you don’t understand. This goes for collectibles as well. You should understand exactly what you are getting, and how it is likely to appreciate in value over time, before you buy.
Collectibles can be fun to acquire. However, you should be careful. You need to understand what makes them valuable, and accept that they could lose value if no one is willing to pay what you want.