Cashing in on Collectibles: Do Coins, Stamps & Art Belong in Your Portfolio?

I must admit; I’ve never been much of a yard sale shopper or a collector. I always say if I have to dust it but don’t use it, I do not want to own it!

I have several friends who love to go to flea markets and garage sales. And they religiously watch Antiques Roadshow, dreaming that they too will find hidden gems that will turn into great investments—treasures such as:

• The 19th-century Navajo blanket inherited from a grandmother (but that originally came from frontiersman Kit Carson) —worth $750,000–$1 million.
• A John and Thomas Seymour 18th-century card table, picked up for $25 at a yard sale and valued at $225,000
• A Picasso painting a man in Ohio bought at a thrift store for $14.14 and later sold for $7,000.

And then there are the folks who scour sales and antique stores for their favorite collectibles. These collectibles consist of anything of value that people want to own, either because they are passionate about the product (59% of collectors) or because they hope they will rise in value (83%).

Many times, of course, the value of the collectible is in the eye of the beholder, and there is no guarantee that a collection will ever be worth more than you paid for it, but that hasn’t stopped the collectors from collecting!

And having been in hundreds of homes as a Realtor, I’ve seen an amazing array of collections, including:

• Salt and pepper shakers (a favorite of my mother’s!)
• Ceramic elephants, bunnies, Hummel and Lladro figurines
• Vases
• Cameras
• Clocks
• Radios
• Coins
• Baseball and hockey cards
• Artwork
• Jewelry
• Stamps
• Military memorabilia
• Automobiles

And if you are like me—not a collector—you may be as amazed as I am to learn that we are in the minority of Americans!

6 Out of 10 Americans Are Collectors

The collectible markets are alive and well with more than 60% of Americans collecting something. As you can see from the following chart, coins, by far, account for the majority of collections (17%), followed by toys, trading cards, and jewelry (each about 12%).

And you might also be surprised at the ages of the collectors these days.

It will come as no shock that 16% of baby boomers collect coins—my parents did too! In fact, coin collecting has been around since the first coins were minted—for the metal value, and since the 14^th century for artistic value.

But now, even younger folks are getting into the act:

• 16% of Gen Zers (born 1997-2012) collect coins
• 20% of Millennials (born 1981-1996) collect coins.

And they also collect other things:

• 27% of Gen Zers collect jewelry
• 20% of Gen Zers collect art
• 18% of Millennials collect trading cards
• 16% of Gen Zers collect music.
  

The Collectibles Market Is on Fire!

According to MarketDecipher.com, the global collectibles market size was valued at $458.2 billion in 2022 and is expected to grow to $1 trillion by 2033.

So, where is all this growth coming from?

The Sports Memorabilia Collectibles Market, now valued at $32.4 billion—thanks to online auctions and e-commerce platforms—is predicted to reach $227.2 billion by 2032.

Preferred products include bobbleheads and statues, hats and caps, jerseys, clothing, and uniforms, flags and banners, bats, balls, prints and posters.

The Sports Trading Cards Market is currently worth $14.3 billion and is expected to grow to $51.3 billion by 2033. The expansion is coming from the emerging nations in the Middle East and the Asia Pacific, especially India and China, and includes character cards, image cards, and autograph cards.

The Toy/Animation Collectibles Market, estimated at $12.5 billion, is forecast to reach $35.3 billion by 2032. This market segment includes collectible dolls, bobbleheads, action figures,

Anime collectibles. cartoon collectibles, and movie character collectibles.

Here Are the Collectibles That Are Gaining the Most Value

The collectibles markets are extremely cyclical. What’s hot today may not be hot tomorrow. Consequently, serious, professional collectors keep up on the trends. And this is what they say are the “hot” items today:

Vintage Comic Books tend to appreciate very well, depending on rarity and condition. A Superman No. 1 (Action Comics) comic was the most expensive private sale of a comic book recently, going for $5.3 million in January 2022.

Baseball Cards, fortunately, have a vast marketplace—online, at sports memorabilia conventions, or at local hobby shops. And their value depends on the age, rarity, and condition of the card. The baseball card that has gone for the most money ever is an Honus Wagner card—the 1911 American Tobacco Company T206 card—which sold for $6.6 million at auction in 2021.

Vintage Bakeware. When my mom died, my sisters and I had no idea the value of some of her collections, and we sold a lot of stuff, including vintage bakeware, for pennies on the dollar. We found out later that we were pretty stupid, but none of us had any experience in the collectibles markets. Mom had reams of vintage Corningware and Pyrex dishes, which may—or may not—have been valuable. All I know is that the most expensive Pyrex bowl from the Lucky in Love line, featuring the hearts and shamrocks design, sold for $22,100 in 2022. Looks like we left a few dollars on the table! Rare Coins, especially old coins in great condition can be very valuable. For example, the Saint-Gaudens Double Eagle, minted in 1933, is estimated to be worth up to $20 million. My dad loved to collect coins, but as far as I know, he never had anything very valuable.

Vintage Toys, depending on rarity, uniqueness, condition, and age can sell for hundreds of thousands of dollars, a 1963 G.I. Joe prototype with hand-sewn clothing and a hand-painted face went for $200,000 in 2003. But with toys, not only must they be in pristine condition, but for most of them to retain the highest value, must also be unopened, in the original packaging. Most of us actually played with our toys, so this segment of the collectibles market is inhabited by mostly professionals.

Stamps that are in perfect condition and rare are in great demand. Interestingly, many are rare because of misprintings, like the Inverted Jenny, issued in 1918. It was a picture of an upside-down Curtiss JN-4 biplane, and a set of four sold at auction for $1.74 million in 2019.

Vintage Magazines can range from several hundred to a few thousand dollars, but the reality is that most will probably go for $5 to $20 per copy, depending on rarity, type and condition. One of the most valuable vintage magazines, a rare first edition of The Shadow No. 1 sold in 2021 for $156,000, the most expensive pulp magazine ever sold.

My brother-in-law, recently deceased, had a huge collection of National Geographic magazines, which have been taking up loads of space for decades. Most of them are likely valued between $3-$10, but my sister is afraid to sell them without figuring out if she has any valuable issues. Some of the issues of Nat Geo have sold for $4,000 to $100,000 each! The whole family is trying to help—wish us luck!

Antique Furniture is valued based on age and its craftsmanship, including construction, materials, hardware, and finish. The Badminton Chest, commissioned in 1726 by the third Duke of Beaufort, sold at a Christie’s auction in 2004 for $36.7 million. But just because it’s old doesn’t mean it has any value. Mom had a 1903 Baldwin piano that my siblings and I thought might be valuable, but we eventually discovered it was virtually worthless, so we donated it.

But I inherited a 1940s Imperial Georgian style carved mahogany octagonal center table that mom and dad had picked up in an estate sale when I was a kid for a few bucks. Today, it’s worth close to $1,000, which is not going to make me wealthy, but it wouldn’t matter since I wouldn’t sell it anyway.

Jewelry’s value is based on materials, the maker or designer, age, and the stones used. There have been some notable jewels that have sold for more than $100 million each, including the Hope Diamond, the Cullinan Diamond, and the Koh-i-Noor Diamond.

Antique, Classic, and Vintage Cars are valued according to the vehicle’s age, condition, and mileage, including the number of original parts in the car. In 2022, the most expensive car was sold, a 1955 Mercedes-Benz 300 SLR Uhlenhaut Coupe, which brought in $143 million.

Additionally, vintage golf clubs, vintage children’s books, vinyl records, retro gaming sets, artworks, fine wines and liquors, shoes, handbags, clothing, perfumes, old photographs, vintage electronics, antique firearms, antique or vintage kitchen appliances, vintage tools, and musical instruments are highly collectible in today’s market.

Can the Average Person Make Money in the Collectibles Market?

The answer is a qualified “maybe.” According to MagnifyMoney, 44% of Americans don’t think collectibles are a good investment.

Although collectibles are often considered “alternative investments,” they really don’t meet the definition of traditional investments like stocks, bonds, mutual funds, or exchange-traded funds.

We reasonably expect traditional investments to have intrinsic value—a measure of what the assets of a company are worth (which are measurable)—and to deliver appreciation and/or income, such as dividends, over time.

But collectibles don’t really have any intrinsic value. Their value can be very cyclical, depending on the whims of collectors—the tastes, moods, and perceptions of value of buyers and sellers.

Let’s look at how the value of a few categories has changed in the last few decades:

Beanie Babies. Introduced in 1993—going for about $5 each—were a rage, with the most expensive one, the Princess Diana Bear, valued at more than $500,000 at one time. Unless they are a limited edition, they aren’t worth much today.

Norman Rockwell Collector Plates, once valued at $50-$75, are now worth $8-$10.

Hummel figurines that sold in the hundreds of dollars in the 1980s can now be had for $50 or less.

Cookie jars, such as those owned by Andy Warhol, used to be worth big money. His collection sold for $250,000, but most vintage jars today are worth no more than $50.

You can add Hot Wheels, McDonald’s Happy Meal toys, Thomas Kinkade paintings, Precious Moments figurines, Franklin Mint ceramics, and Cabbage Patch Kids to the list of collectibles that were once very hot and now are not.

Whatever Happened to NFTs?

I would be remiss if I didn’t mention the boom and bust of the NFT—a once very-hot collectible.

The first NFT (non-fungible token)—Quantum—was created in 2014. Wikipedia defines an NFT as “a unique digital identifier that is recorded on a blockchain, and is used to certify ownership and authenticity. It cannot be copied, substituted, or subdivided. The ownership of an NFT is recorded in the blockchain and can be transferred by the owner, allowing NFTs to be sold and traded.”

Quantum was “a kaleidoscopic, pulsing octagon,” auctioned through Sotheby’s for $1.47 million, and it started a rage.

Towards the end of 2017, the CryptoKitties game craze sent the hype swirling around NFTs, as folks traded the “cats” that boasted their “own digital genome,” which allowed them to be bred through an algorithm mirroring real-world genetics.

From there, the hype exploded.

Between 2018 and 2021, the market couldn’t get enough of NFTs, growing 60 times its original size, to an astounding $17.6 billion of NFTs sold in 2021. The marketplace was fueled by celebrities, young, rich influencers and artists who designed, sold and traded NFTs, sending them to lofty prices.

But NFTs were not just the creation of the young and hip. Companies like NIKE, Gucci and Tiffany also got into the act.

And as with all over-hyped products, the market was flooded with creators, diluting it; fraud raised its ugly head, and investors became very skeptical about this product that, again, had no intrinsic value. The dominoes began to fall and by Spring of 2023, Meta said it was done—no more support for NFTs. Boom and bust.

However, NFTs are still around, and some experts think they will rebound. But for me, that’s just way too much speculation when I could have made a lot more money in stocks like the Top Performers of 2023, listed in the table below.

2023 Top-Performing Stocks

Collectibles Don’t Meet the Definition of “Investing”

Unlike mainstream investments, collectibles have no reasonable expectation that the longer you hold them, the more they will be worth.

Plus, there are a few more reasons why collectibles may not be the best place to put your hard-earned money.

The number one problem is rampant fraud in the industry. The non-expert collector is pretty much a sitting duck for the fraudsters that populate the industry. It’s difficult to find a “real” expert to help you inspect, verify, and value your collections unless you are a wealthy collector with a great network and substantial funds to use for verification.

There are plenty of horror stories:

1. After a retired New Jersey firefighter passed away, his family discovered that the more than $100,000 he had spent on sports memorabilia, including balls and bats signed by Mickey Mantle, Babe Ruth and other baseball stars, also included a truckload of fakes. One of the saddest aspects of this story is that he had been careful in selecting his dealer, a collector who became famous when he bought the personal collection of New York Yankee Joe DiMaggio, establishing some major credibility. Later, the dealer was found to have sold millions of dollars of counterfeit baseball memorabilia.

2. Early in 2023, more than 600 fake sports championship rings (NFL, NBA, MLB, NHL, and NCAA) were confiscated from a South Carolina memorabilia store. The estimated retail value of the rings was $15 million!

3. Indonesian Rudy Kurniawan arrived in the U.S. in the mid-90s, eventually settling in Los Angeles where he began his obsession with wine, buying expensive bottles ($400-$500) along the way. He became known as a wealthy collector, spending as much as a million dollars a month on wine, which he generously shared with his friends and associates, lifting him into exalted social circles. His one quirk—he wanted to keep all the wine bottles after the tastings. Hmm…

In 2006, he convinced John Kapon, an ex-hip-hop producer who ran Acker Merrall & Condit, a boutique wine auction house in NYC to create a wine auction for some of his rare collection. That auction was extremely successful, garnering $10.6 million in sales. Nine months later they did it again, setting a record for the highest-grossing wine auction in history, some $24.7 million!

That was the beginning of his downfall, when collectors began questioning the veracity of his “rare” wines, leading to a 2007 Christie’s auction pulling a lot of Kurniawan’s 1982 Château Le Pin “after the company deemed them to be fake.”

And then billionaire Bill Koch hired authenticators to vet all 44,000 bottles in his collection. They found that five of his purchases ($75,000 worth) from Kurniawan at the 2006 New York auction were fakes.

Kurniawan’s home was raided by the FBI in 2012. They found:

• 200+ old wine bottles in various states of forgery
• 19,000+ fake, artificially aged printed labels from the world’s 27 rarest wines, and detailed notes on how to fabricate them
• Buckets full of corks, sealing wax, glue, and stencils
• Rubber stamps bearing the names of famed châteaus
• Formulas for recreating the taste profiles of rare vintages using a combination of much cheaper wines.

Wine is just one of the many collecting schemes that are vulnerable to fraud. Art is the number one. Experts such as the former director of the Metropolitan Museum of Art, Thomas Hoving, estimate that up to 40% of artwork for sale at any time is fake! Works reputedly by Vincent van Gogh, Leonardo da Vinci, and Pablo Picasso have all been exposed as fakes.

The top possible (not always proven fake) art forgeries in the world are:

• La Bella Principessa attributed to Leonardo da Vinci, which may be worth $20,000 or millions
• Christ and the Disciples at Emmaus attributed to Vermeer, sold by forger Han Van Meegeren for $30 million, was later a proven forgery
• The Getty Kouros was purchased by the Getty Museum for $7 million, but most art experts today believe it is a good forgery.

You see, even the wealthy and the supposed experts get taken sometimes.

One of the newest and best fraud tools in the art business is artificial intelligence, which is making forgeries even harder to discern. So, watch out art collectors!

Markups can vary widely. Collectors can expect to pay 20%-30% markups for their purchases, and sometimes, as much as 100% if they buy from high-end auctions or by well-known dealers. These markups can immediately—and radically—reduce any potential gains for your collection.

It’s hard to find good comps. I sometimes find it difficult to find good comps in the real estate industry; after all, most homes aren’t cookie-cutter models. And it’s the same in the collection business. You need to find the most updated comps and then increase or decrease the value of your item accordingly, depending on its condition and rarity. Just because a recent trading card went for $5,000, that doesn’t mean yours will.

Long ago when I was a banker, one of our executives took an Azerbaijan prayer rug as collateral for a loan. I just remember that the bank had a heck of a time figuring out a price for the rug, but ended up with $10,000 as the agreed-upon value.

Lack of liquidity can prevent you from selling a collectible when you want or need to. Unlike the securities markets, which have a ready trading forum via the stock exchanges around the world—as well as a perceived value for a stock, as I said earlier, in the collectibles’ marketplace, value is “in the eye of the beholder.” And your item may not be in its “hot” cycle, or its real-world value may not match your perceived value. In other words, finding a buyer may not be that easy.

Experts say that nostalgia runs in 20-year cycles, meaning your collectible today will be more popular in 20 years. Of course, that is, if anyone wants to buy it!

There is no set rule; if anyone could predict what stuff would be popular 20 years from now, that person would have the collectibles market conquered.

Your once valuable collectible may now be totally worthless. Case in point, Funko is dumping more than $300 million of Funko Pop! Star Wars action figures due to waning demand and overstocking. The company said it will write down inventory to the tune of $30 to $36 million. Funko is a company that posted more than a billion dollars in sales in 2021, a 58% increase from the prior year.

Damage will reduce the value. As I mentioned above, many items—like toys, for instance—need to be in their original boxes, and never opened. Also, furniture, jewelry, art, and other collectibles may be devalued by a small scratch, tear, dent, or blemish. And sometimes, taking a stamp off its original envelope or staining a piece of antique furniture can make it absolutely worthless!

You must properly store and insure collectibles. The sun, water damage, heat or lack thereof, can all damage your collectibles, so you must secure proper storage before you buy. That means no outdoor sheds or moist basements! And if you are into buying expensive collectibles, don’t forget about insurance, which will cost you about 1% to 2% of the item’s value, per year. So, if you purchased the 2009 Stephen Curry 1-of-1 rookie card for $5.9 million, you can expect to fork over $59,000-$118,000 annually to insure it!

You won’t collect any income while you hold your collectibles. Unlike stocks and bonds, which may pay you dividends or interest, your collectibles will just sit there taking up space and costing you insurance and storage money until you sell them.

Your children do not want your collections. That is one of the biggest complaints I get from my real estate customers—their collections of silver, fine china, global souvenirs, figurines, jewelry, and even homes—are just not on the wish list of the younger generations. And when you die, unfortunately, many children will do what my siblings and I did—sell those precious items for pennies on the dollar. Market Decipher reports that just 35% of investors who inherited a collection had an interest in it.

Uncle Sam loves it when you sell your collectibles. And he may charge you 28% of your gain if you’ve held on to it for more than a year. If less than a year, you’ll be taxed at your ordinary income rate. Note that securities owned more than a year prior to selling them are taxed at the 15% capital gains rate.

High interest rates impact the collectibles market. Since the pandemic boom, auction houses have seen a 30%-36% decrease in their six- and seven-figure auction sales, believed to be due to the rising rates of the last couple of years.

Lower returns than stocks and bonds. Sure, the crazy and fun stories are out there. I cited a few earlier in this article. But the truth is that even the most popular and hot collectibles—like diamonds and stamps—have generally returned a maximum of 5%-10% to their collectors (and that’s not annually!). Conversely, if you invested in the S&P 500 Index, your historical yearly average return would be 9.26%.

Here’s a recent table from Deloitte depicting returns of various collectibles as well as the securities markets.

All in all, collectibles are not for the faint at heart. And one more thing that may make you think twice about jumping into the collectibles market is this:

In Collectibles, You May Need a Lot of Money to Make a Lot of Money

Face it, you probably aren’t going to get rich on collecting vintage toys, bicycles, Civil War artifacts, or even art—unless you are really lucky and also have the money to play with the big boys and to hire the caliber of experts needed to verify and assess your collections.

That’s why 26% of the top 200 art collectors in the world are on the Forbes billionaire list, according to ARTnews.

If you already have a lot of money, you can afford to pay $30,000 for a Rolex watch that resells for $50,000, or buy a 1973 Porsche 911 Carrera RS for $560,000 and resell it for $1.2 million.

Alternatively, you can buy a share of a fundamentally well-run company for mere dollars, or if you want to be very speculative, for pennies (I wouldn’t advise those kinds of investments!). And while the stock market is not without risk, your chances of gains are much higher than in the collectibles markets.

But if you insist on collecting, do it because you have a passion for something. Here’s a look at recent statistics that UBS put together regarding the collectibles industry.

4 Rules to Live By

And one last thing, if you do become a collector, here are four rules agreed upon by some savvy investors, reported by the Fiscal Times:

If it’s advertised in a mass-circulation journal as rare, important and potentially valuable, stay away—unless you like it for its own sake. Fiscal Times says, “Items specifically made to be collectible almost never are.”

Here, you can think of all those Royal coronation plates, inauguration souvenirs, Franklin Mint ceramics, and those coins advertised on late-night TV. There is hardly ever a secondary market for these items (unlike the securities market!).

Collecting goes in fads, as I mentioned earlier.

Beware thinly traded markets. I can’t help but think of those art auctions on cruise ships. I’ve sat in on a few of these and have yet to have heard of any of the featured artists. Sure, buy a painting if you like it, but don’t expect it to increase in value.

If you can’t afford to be patient—financially or temperamentally—find another hobby. You could be waiting years for your items to become “hot.” So, if you need the money soon, collecting is not a good idea.

What About Those “Investments” That Pool Collectible Items?

Most of these investments are for art and metals. In the art world, the majority of these investor pools are private—and pretty risky. You’ve probably heard of Masterworks, a company that sells partial shares of artwork to investors. The company touts some questionable mammoth returns of this artwork over the broad market indices, but it looks a bit like cherry-picking to me, and doesn’t give an adequate comparison to the indices for a number of reasons, but especially because it doesn’t take into account the dividends paid by the stocks included in the indices. Additionally, Masterworks charges a 1.5% annual fee as well as 20% of any gains.

Other than that, I would say, buyer beware. But if you do decide to “invest” in a company like this, please keep it to a very small portion of your portfolio.

Conversely, in the case of metals, there are plenty of publicly traded funds that pool investor monies and buy bullion, like the three I’ve listed below.

But you may note that the price of gold—around $2,000 an ounce right now—has just recovered to 2020 heights. And JP Morgan is forecasting that it will rise to $2,175/oz by the fourth quarter of 2024 before peaking at $2,300/oz in the third quarter of 2025—which is again not as great of a return as you can get in a stock market index.

So, I think “buyer beware” nicely sums up the collectibles market. If you are passionate and want to collect particular items, go ahead, but don’t plan on retiring with your gains. Instead, find some great securities, buy them, hold them, and then sell them at a profit.