Collecting as an Investment Has It’s Limitations
Collecting is a very personal passion. It’s also one that has potentially huge financial ramifications. Many collectors don’t consider, or at least focus on, the resale value of their collections because, quite simply, they can’t imagine ever parting with their prized collection. There’s always that temptation though – family and friends who don’t ‘get it’ will read an article about a comic book collection selling for millions after the collector’s death and ask what your collection is worth.
Truth is, while you may have no intention of ever selling your collection, eventually it won’t be your decision. If you are lucky enough to have children or heirs in the next generation who share your passion, and you plan to leave your collection to them, then you’re off the hook as long as you make the necessary arrangements in your estate planning.
If not, there is a real possibility that your collection will be sold and it’s up tot you to decide how that will happen. Will it be sold of piecemeal at an estate sale or will you make arrangements to have it auctioned off after your death. The choice is yours but it only makes sense that a collection you so lovingly accumulated during your lifetime should be thoughtfully included in your estate planning. I came across this article and thought it was worth sharing. Be aware that the author is Josh Levine who co-owns J. Levine Auction & Appraisal in Scottsdale and EJ’s Auction & Consignment in Glendale, Arizona. His company profits from collectors selling and buying, so his focus is on helping sellers get he most return on the items they are selling – it’s simply good business on his end. Seven if selling is the furthest from your mind, the article is thought provoking.
Here’s the article in full:
I am often asked, “When is the best time to sell my collection?”
And not to be one accused of keeping my opinions to myself, I say, “Strike while the iron is hot.” What do I mean by that?
When you see record prices happening, sell your collection. Sounds obvious to most, but so often I hear, “I’ll hold on to it. It can only go up from here,” or “Imagine what it will be worth 20 years from now!”
I don’t know if it’s prospecting, greed, or something their parents ingrained in these collectors, but I think it’s a losing bet. Let me cite a few examples.
Fifteen years ago, we were selling Hummel collections and prices were riding high. I would see collections in my travels and ask folks if they wished to consign for auction, and more often than not, the owners would decline. Their consensus was, this would never end, and Hummels would keep increasing in value.
Then about 10 years ago, large collections began to be sold off and we could see it coming quickly. The crash.
The collectors blamed the economy and kept waiting. And waiting. … It wasn’t the economy, but simple economics. Huge supply, in this case, and no demand from the next generation. I have yet to meet a Gen X’er or Millennial that collects them. Most have no idea what they are.
The next example is toy trains.
A Pre-War Lionel Train set was money in the bank for a long run as they were desired by many collectors and enthusiasts spanning several generations. They all had a train set when they were kids, and had many fond memories of them. They sold like hot cakes, and there were many serious collectors.
Over the past five years, toy collectors’ tastes have changed, and you can see the Hummel thing happening. A 2003 price of $12,000 for a Lionel Pre-War set is now $1,500 if you are lucky.
Some say it was video games that caused the younger generations to lose interest, and that really may be true.
What to do now? If you are thinking of selling a collection, sell it when it’s hot.
What is hot in toys? Star Wars toys from 1977 through 1984 as well as most action figures from this period. Hot Wheels Redlines and AFX Aurora Slot Cars from the late 1960s through the early 1970s.
Let me give you my forecast. Star Wars is going to peak with this new movie release. It’s a great time to sell your Star Wars collectibles.
Hot Wheels and Slot Cars are more urgent to sell as I feel they are going to go the way of the train set soon.
I hate when I see a collection that was just held on to a little too long. It’s just like playing the stock market, but when they fall off the cliff, they don’t recover to former glory.
courtesy of AZCentral