Whether you are interested in collecting expensive baseball cards or anything else, it is essential to understand that there are benefits and drawbacks to investing in collectibles. In the past 30 years, the baseball card industry has exploded, but it has not always been sunshine and roses. The same problems exist in other collectibles marketplaces.
- Personal development and satisfaction
This, in my opinion, is the most crucial reason for anybody to collect. The building that set or discovering that buried treasure you have been looking for years is a lot of fun. The process of collecting things gives us the impression that we are doing something significant, even if it is just for ourselves.
Collecting also brings us closer to other individuals. When I go into his baseball card shop, I have an immediate connection with the proprietor. We have the same passion, which we use to help us communicate and build connections.
- The greater the demand for a collectible, the more likely it is to be profitable.
Other factors come into play here: the item’s age, creator/manufacturer, uniqueness, and current condition. But nothing, in my opinion, drives prices more than desire. When people desire something, the price rises and collectors may profit from this tendency.
- To broaden your horizons
The ability to diversify into other assets is a third advantage of investing in collectibles. Seasoned investors who already have a robust stock portfolio may want to diversify their holdings into other asset classes. Bonds, real estate, commodities, and even collectibles may fall under this category. As previously said, many of the world’s wealthiest investors seem to regard collectibles in this light.
Collecting is emotionally charged to the point that our behaviors may spiral out of control. If we want something, we will go to any extent to get it, even if it means overpaying.
Furthermore, we may get so consumed with collecting that it starts to have a detrimental effect on other aspects of our lives. If your collection takes priority over your finances or family ties, you have entered a dangerous zone.
- Changes in value
This is the most significant disadvantage of considering collectibles as an investment. The purchasing public’s whims and preferences significantly influence the value of goods. What is popular now may not be so popular tomorrow.
During the 1980s and 1990s, baseball cards suffered this. Topps had been the only producer in town for decades. New card companies such as Fleer, Donruss, and Upper Deck arose due to a sequence of events. The baseball card market got saturated all of a sudden. Due to overproduction, the value of most cards produced during that period has fallen to the point that they are now useless. You cannot honestly give them away.
Liquidity is the third factor to consider. This is a significant problem that every collectibles investor should think about. Collectibles are a risky investment. This implies they are difficult to transfer or sell. You, like a property, need a buyer. If none exist, you will have to make do with the collectible.