The collectible shoe market now has a value of $10 billion, while a rare Superman comic just sold for $2.6 million, some of these alternative investments are outperforming 52% of stocks in value.
As a simple definition, collectibles are any items that are worth far more than their original sale price. Many of these are now considered alternate investments, alternate meaning these asset vehicles don’t fall into other categories such as stocks, bonds, real estate, etc, according to Investopedia.
Many types of collectibles are now reaching extraordinarily high values and have garnered the attention of investors seeking to maximize their returns as a valuable alternative asset class.
There are all types of collectibles to invest in: art, baseball cards, figurines, comic books, celebrity memorabilia, and Rolex watches, while more recently, shoes and guitars were fetching very high profits.
The most recent collectibles are the digital NFTs, but in this article, we’ll keep our focus on physical, tangible items.
Investments making money in the past five years are classic cars (330% appreciation in the last decade), fine art (21% appreciation), memorabilia (sports, celebrities), vinyl records, and coins, according to money made.
Here’s a look at two collectibles markets that have seen some huge profits, where the items can continue to gain value over time, but also look at how they can sometimes be volatile depending on speculation and demand.
Collectible shoes have become a $10 billion business. Certainly, demand is a vector, but a larger factor is the limited availability of certain releases. To that end, some companies have initiated lotteries prior to their sale.
Investors interested in collectible shoes need to do research to know what is selling and what isn’t. Good sources for research are eBay and Stockx, which shows every shoe ever produced, how much they are selling for, and their market movements, Kiplinger reports.
Predicting trends, some investors buy certain shoes knowing they will sell out but remain in demand for years. According to a 2022 study, “nearly 80% of Jordan sneakers have gained resale value over the last 12 months. By contrast, just 52% of stocks in the Dow 100 are worth more than they were.”
The Nike Dunk SB Low Paris sold for $69 on release and currently have a value of $450,000.
This April, the Bad Bunny x Adidas Forum Low “Blue Tint” sold for $160 on release and is now reselling for between $475 to $1,220, making a return between 29%-61% in only three months.
The hottest marketplaces for reselling shoes are eBay and Stockx.
In the early 2000s, investing in guitars was a red-hot market. Investment opportunities are to be found in vintage guitars. While age alone is not a factor, it is a very important one. Vintage is typically defined as anything made in the 1980s or earlier.
American-made Fender and Gibson electric guitars from the 1950s and 1960s are among the most valuable. Vintage Rickenbacker guitars are also valued. Among acoustic guitars, the brands in demand are Martin, Gibson, and Guild.
To succeed in this field, you need to either be an expert or talk to experts for advice. The values of vintage guitars are based on highly subjective rules that one must understand, according to money under 30.
What’s fetching sky-high prices today is not necessarily a winning formula. What’s important is what will rise in the future.
For example, in the early 2000s, prices were soaring and speculators jumped in. Then the Great Recession hit, and prices fell as much as 30% by the end of the decade.
In 2006, a 1956 Gibson Les Paul ‘Gold Top’ had a value of $85,000. By 2019, the value had dropped to $35,000 which is still a high value, but not so much if it was purchased at a higher price. Your average Gibson Les Paul (including the gold top) today sells for a price between $2,900-$8,500, with more custom models demanding higher prices.
The takeaway here is that guitar prices are affected by trends, speculation, and economic factors such as inflation and recessions.