Profiting from collectibles may not be in the cards.
The volatility of the stock market may be doing wonders for gold, but for collectibles not so much.
Less than 10 percent of investors surveyed last month by Millionaire Corner are investing more in this form of alternative investment, while just over 65 percent said they are not. The negative response was mostly uniform across all wealth and age levels, although interest in collectibles among these investors was highest among business owners (13.8 percent) and those ages 41-50 (13 percent).
Affluent Americans typically allocate about 10 percent of their assets to alternative products such as gold, which unlike collectibles, a more niche product, spikes in times of economic uncertainty. But the tumultuous financial markets in early August compelled less than 4 percent of Millionaires to sell other investments to purchase gold, according to a Millionaire Corner survey conducted that month. These wealthy investors were much more likely to take advantage of the downturn by purchasing more stocks than investing in gold. More than 28 percent said they had purchased additional equities.
Senior corporate executives were the most likely to add to their equity portfolios and to shore up their gold reserves. More than 32 percent bought stocks in the wake of the steep selloff in August, while 6.7 percent sold some of their investments to purchase gold. More than one-fourth of younger, less risk-averse investors also bought stocks, while 3 percent sold some of their investments to purchase gold.
Only 5 percent of Non-Millionaires with a net worth between $500,000 and $1 million sold other investments to invest in gold, while fewer than 22 percent purchased additional stocks.
Collectibles, such as baseball cards, vintage toys or fine art, have a more subjective appeal to investors, but in this market, patience is definitely a virtue. A collectible can take a long time to increase in value and turn a profit, and its future value can be anything but certain. While vintage and more rare baseball cards still have tremendous value, the heyday of baseball cards has long since passed, a victim of supply (too much) and demand as well as disillusionment with what in more innocent times was considered a hobby but in the 90s became a speculative market.
Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.
A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.