Can investing in collectibles really work?
Don't run out and pour your life savings into baseball cards.
Kevin writes in:Skip to next paragraph
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I have a small collection of vintage baseball cards from the 1930s that have a list value of about $30,000. I started collecting when I was a kid and my grandpa gave me some to start with, but over the years I’ve bought many more, almost completing a Goudey Heads Up set. I have had them all graded. What I’m wondering is whether I should continue holding on to these or not. I know you’re not a baseball card dealer or trader, but I do know you know something about baseball cards and you’ll give me your honest take on the situation.
I’ve received so many emails from people writing to me wondering why their giant pile of 1988 Topps cards are worthless, so this baseball card related email was actually a breath of fresh air. It also has given me a good reason to spell out my perspective on collectible investing.
First of all, I would never rely on the long term future value of a collectible. The problem with such items is that they rely entirely on supply and demand, and with collectibles, there’s no real need for the item. Demand rests on the cultural interests of other people, which can shift over time. Fifty years ago, sports besides baseball were barely a blip on the national radar. Twenty five years ago, Garbage Pail Kids were in such hot demand you couldn’t find them on store shelves. How things change.
Similarly, I would never invest in any collectible where there is a large supply. Any time there is a “collectible” out there in large supply, the only reason that “collectible” has any value at all is due to a huge demand in that moment, and the public is fickle. Instead, focus on seeking out the truly rare items and don’t spend your time on the rest if you’re “collecting” for profit.
Second, even if you’ve covered the rarity issue, the future value of any such items relies on a continual interest in the phenomenon being collected. If that phenomenon decreases significantly or goes away, your collectible value drops dramatically. I once had a set of fairly valuable Star Wars trading cards whose value dropped precipitously over the past decade because that trading card game was on longer supported.
Having said those things, the best reason to be this kind of a collector is that the items you’re collecting have some personal value to you.
I can think of two distinct examples of this from my own life.
First, I, too, have a small collection of vintage baseball cards that have largely held their value over the last decade. They’re PSA graded, like yours are. For me, though, they have more value than what I could get for them on eBay because of the memories and stories associated with them. They make me remember family members and times watching baseball with them when I was young. They remind me of the first time I went to Wrigley Field. They’re aesthetically appealing to me and scratch that itch I have for vintage baseball every time I look at them.
That has value. I get value from those cards every time I look at them. Even if I sell the cards for a dollar loss at some point – and I don’t think they’ll ever be worth less than the pittance (or the gifting) that I originally paid for them – it’s still not really a loss because of the many instances of joy they’ve brought into my life.