When Collectibles Become Investments
When the collectible markets have a better record than U.S. stocks, the wealthy might want to reconsider where they invest their money.
Whether you have an eye for fine art, a taste for exotic wines or a need for speed in a classical car, collectible markets reflect personal passions that usually fall outside the realm of one’s professional life. For those with money to spend, finding your niche within the collectors market might pay off.
According to an article by Robert Frank, over the past 10 years an index of the nine main collectibles markets grew 175%, a record far better than U.S stocks. Aside from collectible furniture, all the categories that were tracked increased in value.
Classic car prices surged 23% by the end of 2012, becoming the top-performing collectible. Surprisingly, coins were a close second and stamps a close third.
When it comes to collectibles, Frank warns not to mistake popularity for performance. “Sometimes the most beloved collectibles are dogs as investments,” he says.
Aspiring collectors should also beware of the insider knowledge and expertise require of the trade. The markets are less regulated and just as complicated as traditional investments.