Investing in Collectibles

From artwork and sculptures to rare wines and old baseball cards, collectibles often comprise a piece of intergenerational wealth and they can serve as an alternative investment that diversifies your portfolio. But be careful. If you intend to pass these and other collectibles of value on to family or sell them and invest elsewhere, you need to appraise and then protect their value.

Diversify with Collectibles

Collectibles are often part of a diversified high net worth portfolio, and they are as numerous as they are diverse. Everything from comic books and sneakers to jewelry and dolls can make up a collectibles portfolio. But is investing in collectibles, which can lose value and whose values can be volatile, right for you? Answers to these questions may begin to help you decide.

What percentage of your portfolio will be comprised of collectibles?

The same guideline that holds true about almost any investment is true with collectibles: you should almost never put all your investments in one asset class. Collectibles, because they are known to be volatile investments, should make up only a small portion of most portfolios. Your financial professional can help you decide when you determine your asset allocation.

But can’t some collectibles grow dramatically in value?

Sure they can. You can see how much some of the rarest and most valuable collectibles have fared in recent years on the chart below. A few things must hold true for these investments to appreciate in value. First, they almost always must be in pristine condition. You’ve heard of collectors who won’t wear a pair of sneakers – yes, some of them are collectibles – or take an action hero figure out of a box. That’s to protect their condition and value.

What do I Need to Know?

The best way to get started is to pick a collectible that you are passionate about like classic cars or wines. Collectibles aren’t as easily traded as some other investments. You’ll need to find a reputable appraiser and specialty insurance to protect yourself financially from theft or damage. Collectibles generally won’t generate cash until sold, and they generally cost money to maintain and store. And, most importantly, you have no guarantees. You’ll also need some time for any potential appreciation. Not all investments will maintain their gains. Collectibles, including some figurines and dolls, have lost value along with losing favor over time.

As with any investment, make sure collectibles meet your risk criteria and that they occupy an appropriate percentage of your portfolio. Consult your financial and tax professionals.

These Collectibles Sold for Some of the Highest Prices Ever

• An 11.15-carat Williamson Pink Star diamond - $57.7 million


• First Marvel comic book - $2.4+ million


• The 1856 British Guiana One-Cent Magenta Stamp - $9.5 million


• A 1952 Mickey Mantle baseball card - $12.6 million

www.artnews.com/art-news/news/leonardo-da-vincis-salvator-mundi-sells-450-3-m-christies-new-york-9334/