Your Sports Memorabilia Collection as an Investment

By Dee Dee Smith

The American Heritage Dictionary defines investment as “Property or another possession acquired for future financial return or benefit.”  With the right knowledge and sound decisions, one can collect sports memorabilia with an expectation of it having a “future financial return or benefit.”

Common terms in sports investing:

Supply and demand - An economic principle.  The more there is a supply of something, the lower the value.  The lower the supply of something, the greater the value.

Authenticity - Assurance of truthfulness or genuineness. 

Certificate of Authenticity - A document that verifies or validates the authenticity or genuineness of the item you are purchasing.

Insurance - Protection against a loss. 

Appraisal - An evaluation of the value or worth of something. 

Price Guides - A compiled list of estimated values for sports collectibles and memorabilia. 

Vintage Memorabilia - Memorabilia that is considered to be very old. 

Officially Licensed - Means that the item has been licensed by a major athletic association such as the National Basketball Association (NBA), Major League Baseball (MLB), National Hockey League (NHL), National Football League (NFL), Pro Football Hall of Fame, NASCAR, etc.

Limited Edition - Only a certain number of these custom pieces were, or ever will be created.  The number of pieces made is determined by the production company.  The fewer the pieces, the more rare and thus the more valuable the piece.

Display Case - Places in which to store and showcase your collectibles.  More importantly, display cases keep your memorabilia free from dust and fading, and unwanted touching or handling. 

Steps to investing:

In terms of investing, one should seek to build a collection instead of purchasing individual pieces.  A collection is simply a grouping of similar or compatible items such as Baseball Hall of Fame memorabilia, a collection of Larry Bird memorabilia or vintage memorabilia from an era like the 1950‘s.  Starting a collection typically begins with finding one or two quality pieces.  Your collection should then be built around those special pieces.

Smart investing is simply a matter of basic economics; if there is a surplus of a product, it will be deemed to be of less value.  Whereas a product that is rare or hard to find will be deemed as more valuable.  Thus, as an investor you'll want to look for items that are not common in the market.  Barry Bonds is known to be one to refuse autographs.  Therefore, any item signed by him is rare and thus in demand.

One of the most important concepts in investing is to be sure that you are buying an authentic or genuine collectible.  Fake collectibles have always been a problem in sports investing.  But with the onset of internet sales and marketing, this has especially become a problem.  To avoid being scammed, be sure to always buy from a reputable dealer such as Sportsmemorabila.com.  You should also look for products that are officially licensed or come with a Certificate of Authenticity.  Before making a purchase, be sure to do some comparison shopping and pricing.  This can be done by reviewing a sports price guide or subscribing to an investors magazine. 

Lastly, even though you are collecting as an investment, you will still want to enjoy your collection.  Follow all of the investing guidelines, but in the end, be sure to collect items that you are passionate about. 

Protect your investment:

If you are collecting as an investor, you will eventually seek to sell your collection.  Because the condition of your collection will determine it's value, you'll want to make every effort to keep your collection in pristine condition.  First, make sure that your collectibles are properly stored by securing them in a protective display case.  These cases will protect your items from fading, dust and unwanted fingerprints.  Next you'll want to take precautions to insure against a loss in your investment.  After having your collection appraised (get a couple of appraisals and make sure they are done by an appraiser familiar with sports collectibles), talk with your insurance agent about adding a rider to your homeowner’s policy to insure your collection in the case of theft, fire or other damage.

More tips for collecting:

Buy what you love, but don’t become too attached as an investor.  If you’re in it to make money, you’ll need to be ready to let go of an item whenever the right buyer comes along.  Trends, prices and values change often in sports collecting; therefore, it is imperative that you become a student of the industry.  You can learn a lot about sports collecting through networking, attending shows and reading blogs, magazines and other trade literature. 

Moving from collecting as a hobby to investing can be very exciting and financially rewarding.  Nonetheless, any investment involves taking a risk.  Be sure to invest with more long-term goals in mind.  You may not be able to buy today and sell tomorrow for a profit.