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Featured Advisor

Kim Butler

Partners for Prosperity, Inc.

City:Mt. Enterprise

State: TX

I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Are Collectibles Good Alternative Investments?

They may be joys in the attic, but what about rates of return?

A 1980 Playboymagazine with Bo Derek on the cover. A Charizard Pokemon card.  A World War II 50th anniversary edition of G.I. Joe. Each is purchased at the time of issue. Each is protectively packaged and stored away with the fervent hope that these iconic pieces will someday grow in value and perhaps finance a child’s college education. So, how did our collector do? Let’s just say our collector better have a more diversified portfolio.  On eBay, for example, a “perfect 10” edition of the Playboywas sold at auction for $31. Not a bad return for an initial investment of less than $5, but still nothing that would pay for even one meal at Northwestern.

Collectibles are the most emotional of alternative investments.  Comic books, Barbies, vintage board games, movie memorabilia, lunchboxes and, of course, baseball cards, are just some examples of collectibles that can evoke the powerful pull of nostalgia. Kept in mint condition, their value can only increase as like-minded collectors seek relics of their youth. Recently, an issue of Marvel Comics’ Amazing Fantasy #15, featuring the first appearance of Spider Man, sold for $1.1 million (original price in 1962: 12 cents).

This is illustrative of how important rarity is in the world of collectibles. While vintage baseball cards still fetch high prices, cards from the late 1980s have comparatively struck out.  Blame over-production.

Other drawbacks to collectibles include the expense of maintaining and storing them and establishing authenticity (many sports star autographs are not signed by the athletes themselves). Given the generally low returns, it is oftentimes not worth it to the collector to sell a prized collection.

But there is something irresistible about collectibles. As Investopedia so aptly put it: “People don’t invest in collectibles, they spend money on collectibles, and TV shows such as Antiques Road Show, Pawn Stars and Storage Wars fuel fantasies of uncovering undiscovered riches in one’s basement or attic.”

The bottom line is that best collectibles are those that will retain and grow in value in the future while giving you joy in the present. In the meantime, can we interest you in a Charizard card?