Investing in Collectibles

Collectibles include art, antiquities, vintage cars, rare sites, Persian rugs, coins, stamps, baseball cards, and other articles that own a potential to be appreciated.

There are many characteristics that distinguish investments in collectibles of the investments in financial securities.

  • Specialized knowledge is required to be able to determine the value of a specific collectible, be it art, a rare site or a vintage car. It is easy to pay too much for a collectible if you do not have the needed experience and knowledge of that collectible item in particular. You should have the knowledge about the factors that determine the value of a specific collectible.
  • The supply and demand usually determine the value for collectibles. For example, the supply of paints of the true great masters is limited, and therefore requires great amounts of money to invest on them. As a comparison the work of unknown artists are plenty, thus they are sold in relatively small amounts of money.
  • The collectibles market is informal and is not regulated. When buying or selling a collectible item, you should have an idea of the value of the item given that you will be negotiating with individual buyers or sellers. There is no updated  price list as in stocks. Equally, there is no government corps as in securities and exchange commission that regulate companies that have their financial securities registered in the financial markets. You could easily pay more or sell a collectible at a much lower price without being able to look for a resource of part of a government regulator. Many collectibles are bought and sold in auctions in which prices can vary.
  • Investing in collectibles does not bring immediate benefits. Returns happen when collectibles are appreciated in its value and are sold at a higher price than the buying one. This could take at least two years.
  • Investing in collectibles is characterized as an illiquid asset with a great transaction cost.

However, for many collectors investing in collectibles provides them of a sense of pleasure and happiness.

Many magazines, sites, and internet websites specialize in providing specialized knowledge over different collectibles for interested investors.