July 23, 2012 at 9:40 pm #17613
How much to allocate to collectibles:
My answer is basically “zero” unless you are a professional. I have been dealing in stamps for about 60 years and I know a good deal about the coin market. Both are far worse than the used car market.
Yes, you can make money in stamps.Bill Gross (of PIMCO fame) sold his British Commonwealth collection in a charity sale and made a substantial profit (in British pounds). But the appreciation appears to have been solely the result of the depreciation of the pound (from what I can tell from press reports – I have no direct info). Plus it was a charity sale (where items tend to be bid far above market value for other reasons).
Certain “trophy items” may continue to go up in value, but tastes change. Just ask anybody who purchased a US Zeppelin set or a highly graded US coin in the 1980s.
So, unless you really know what you are doing, stay away from collectibles and do not trust any “expert advisors”. The way you make money in collectibles is by buying them cheap not by hoping for appreciation. To buy cheap, you need to know what you are doing.
Gernot ReinersJuly 26, 2012 at 4:54 pm #27257
Gernot is right, except that even experts make mistakes. I have a good friend with a barn (heated) full of 18C furniture and paintings, superb pieces, now worth about the “cheap” 1960 price. It is out of fashion. The cost of keeping and maintaining the expensive clutter continues.
I am a photographer and “collected” lenses for large cameras, to use with an 11×14 inch camera for Platinum and Silver prints. In the 1980s the lenses were cheap, dirty and neglected. I cleaned and repaired them myself over time and sold them recently through eBay to , surprise, Chinese photographers, not Japanese or American, for ten times the price. It’s their turn to have shiny curved prismatic glass and brass. I would never have anticipated the market. I was just lucky.
Colored diamonds are risky in my experience. If a new source is found, or a big collection hits the market, down goes the price. When people have debts to pay, diamonds are not of great interest. There are always some rich buyers, but they become “cheap” in hard times. Diamonds are easy to move though, from countries with currency restrictions… easy to swallow for smugglers.
I have photographed for many collectors. What I have learned is that the only reason to collect anything is to really like the object because it may be around for a long time.
Even fine buildings, such as Bill has talked about in Ireland, have become unfashionable and neglected. I find it sad to see the imagination, creativity and work of the past treated so poorly. It is worse than a bottle of whiskey event. It’s criminal. It may be a good time to buy fine houses, and be custodian, if that lifestyle is desired, but it may not be a good “investment”. The part that is interesting, much better than a REIT, is taking advantage of silly mortgage tax laws, the low interest rates and leveraging the loan in anticipation of paying the rent seekers back with less … a tribute to the talented labor of the past.
It is more difficult to do with other collectibles until we can work out how to take advantage of credit cards to do it.August 3, 2012 at 12:26 am #27258
My view is to use large reputable dealers e.g. Stanley Gibbons for stamps.
See the Bloomberg rare stamp index of SG; it has shown consistnet growth over the last 50 years.
Contact Geoff Gibbons (GAnandappa@stanleygibbons.com) whom I have dealt with or look at their web site and learn more.
I only personally stick to argyle diamonds and stamps, not other collectibles like lenses, antiques or whatever else.
Cheers.August 7, 2012 at 3:13 pm #17972
Collectables are one of the 7 asset classes and have a place in everyone’s portfolio BUT do not collect if you are not willing to become an expert in your field. It takes time and effort. Sort of like the old saw about playing poker. If you can’t spot the mark at the table in 5 minutes then get up and leave because you are it. Finally as stated above, only collect that which you like and enjoy because as Clive says, “It may be around for a long time”. As with most investments your money will be made when you buy it low. As my father used to say, “If you buy it cheap enough you can always sell at a profit”.
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