5 Collectible Options From Which You Can Collect Big Cash
There are sensible ways of making money with collectibles. The value of precious items such as art, classic cars, rare coins and even fine wine, has skyrocketed in the recent years. Nonetheless, if you’re an amateur, it’s best to invest for enjoyment first, and then for profit. Collectibles are not like average investment types such as bonds and equities. First of all, they’re part of a market that doesn’t provide liquidity considering that the prices are determined via separate sales. Here are 5 collectible options that can big significant profit.
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Fine wine
Unlike luxury collectibles such as art, investment-grade wines with a proven history of price appreciation are a lot more volatile. That’s because wine has increased chances of changing in taste. Even though the sub-index of the fine wine market only increased by three percent in 2012, in the past decade it increased by 182%. General interest in wine investing grows because specialists predict a global wine shortage; the fewer the wine the higher the chances for investors to sell it at a more substantial price.
Grand Cru wine varieties from the French regions of Burgundy and Bordeaux have always dominated the market. If you’re an avid collection with a passion for wine, your portfolio should feature mainly red wines because they take longer to mature, thus becoming more valuable. Always deal with a reputable merchant and before spending any money, check to see if the wine has proof of authentication.
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Art
The Luxury Investment Index estimates that fine art is an extremely sensitive type of collectible. It features extreme volatility because of its individual nature, and that’s one of the reasons why its sub-index fell 6% in 2012. Nonetheless, there are avid collectors who can make good money with fine art. Currently, the record holder is the “Three Studies of Lucian Freud” that belonged to Francis Bacon; it was sold for the outrageous amount of $143 million.
From a historical point of view, fine art adheres to a 7-year cycle. It often struggles due to various factors, such as a tough economy or big players who pop out of nowhere and steal the show. Regardless,art can and is considered a form of collectible that can bring substantial profit. The secret to making money is to know the market and stay informed.
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Coins
At the end of 2013, the sub-index for rare coins increased by 9%. In thattime interval, only the sub-index for vintage cars managed to surpass the coins. A record was set last year when the Flowing Hair Silver Dollar was sold for $10 million. It is believed to be first patented US coin dollar; and that’s not all. A 102-year old man from St. Louis sold his extremely rare collection of coins for $23 million at a NYC auction that same year. Collecting rare coins is a type of investment that demands a lot of patience. In 2013, the interest increased because gold prices starting falling. How big of a risk are you willing to take in order to make money with coins?
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Stamps
Rare, vintage stamps are among the oldest types of collectibles. Buying stamps is a rather new type of investment only the wealthiest people can partake in. Back in 2010, the Swedish Treskilling Yellow was traded for $2 million and is currently considered one of the world’s most expensive stamps. Expert collectors agree that stamps are increasing in value because they’re getting so much publicity. However, it takes a lot more than a couple of stamps from 2005 to make money with a collection, but that’s a not a reason to get discouraged. Think about it this way – your 2005 collection may be worth something 50 years from now.
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Classic cars
Last but not least, we have classic cars, probably the most profitable type of investment from the collectible category. In 2013, the sub-index for this category rose by 28 percent, which is pretty good. It looks like this market has finally stabilized and last year two auctions set new records: a Mercedes-Benz Formula One Racer from 1954 was traded for $26.5 million and a Ferrari 275 GTB/4 NART Spider from 1967 was sold for $27.5 million. The funny part is that the Ferrari’s value was between $8,000 and $14,000 back in 1967.
Category: Investing
