Can you use your passion for stamps, autographs, movie memorabilia and other collectibles as an alternative investment?

Of course.

Some items within these categories show extraordinary returns.

And as a category they represent a scarce resource - that is not going to become more available and is more likely to become less available - for which these is demand.

That should mean a general upward trend across the sector.

Let’s take a look at how you can invest in collectibles.

Collectibles is a broad category

We sell collectibles, as you can see, and it’s a broad and diverse group of objects.

In fact, you can’t really define collectibles in a satisfactory way, though it’s worth quoting a Forbes definition:

“Collectibles can be defined as items that are worth more now than they were when they were originally sold.”

Sold for one penny in 1840, the fact that this stamp was used on the first day of Penny Black use make this item extremely rare and its superb quality adds to the attraction. 

You can pick holes in that definition too, but it captures the idea that collectibles are desirable because of what they are.

Well-known collectibles are: stamps, coins, autographs, movie posters, watches.

It can be hard to value collectibles

Collectibles that are valuable usually derive their value from their rarity (which is often a function of their age), their quality and condition.

There also needs to be a market for them. Competition for items drives up value. You need other collectors. Beatles items are far more valuable than those associated with, say, The Searchers (another hit-making Liverpool band of the same era) because far more people want the Beatles stuff.

And this demand is often indefinible and volatile.

We’re talking about something like star quality here.

Many collectibles derive their value from the person to whom they’re associated.

And, they may derive extra value from the particular circumstances in which the item was created.

A story.

This makes collectibles hard to value.

The easiest way to find the “value” of a collectible is to sell it.

Even items that are given formal valuations by authorities - stamps, watches, for example - are worth what someone is willing to pay for them.

One of these signatures is not like the other, and this unique link to James Dean makes this yearbook very desirable. 

Collectibles are an alternative investment

Collectors can often be a little obsessive.

Most are driven by a passion for their subject.

And, that’s a great driver for any collection.

But, it’s not always the best way to manage an investment portfolio.

It’s easy to find stories of collectors throwing all their cash into the objects of their desire.

But, you should never make collectibles the major part of your investment portfolio.

They are an alternative investment and a diversification tool.

It's a personal link to one of the greatest figures in world history - he held this picture, that pen.

Particular attractions of collectibles as investments

Nevertheless, there are some pluses to investing in collectibles that you won’t find in other categories of investment.

And, it’s why collectibles can see sudden market surges in particular times.

Collectibles are very portable.

In the vast majority of cases they are physical objects that can be carried around.

You can’t “freeze” a collectible.

It’s not a pleasant subject, perhaps, but physical stores of value are often sought after in times of instability. Gold goes up. And so do collectibles.

Collectibles are interesting

When advising on collections my first thought is always of personal fulfillment.

If you’re buying to invest then that brings another concern into the equation.

But, the best - and probably most financially rewarding - collections are born from passion.

As collectibles are such a broad category, everyone can find something that rewards them and resonates with their interests.

To look just at stamps, you’re entering an arena of history, geography, politics, design…, it’s really fascinating.

Collectibles reward the engaged investor

Collectibles are a sphere of expertise.

And, those who know their stuff will be rewarded.

This is true of all investments to a degree. And for many people the joy of the game of trading, bargain hunting and so on is pay-back in its own right.

But, you’re not going to discover an undervalued share in a sale room on a rainy English afternoon.

And feel the triumph you get when you buy it.

Or, find out some old family papers come in an envelope with a sought-after Victorian stamp on it.

Just last week a copy of the US Constitution was sold for $9 million.

It had been in a filing cabinet draw.

Collectibles are rewarding in their own right

How often do you get your share certificates out to show friends after dinner?

Maybe I’m moving in the wrong circles, but it wouldn’t be my idea of an interesting evening.

The chance to link yourself directly to a moment in history is just one of the reasons these Charles Lindbergh artefacts are so valued.

Your signed Marilyn Monroe check?

Everyone will want to see it.

Your John Lennon hair?

What a conversation piece!

Owning history is a reward in its own right.

You become a custodian.

Realistic investments in collectibles

You need to be aware of the limits and dangers of investing in collectibles too.

As we’ve said, you shouldn’t be putting all your eggs in this basket.

And just as collectibles reward those who invest time in them, they also demand time.

Collectibles markets can be volatile. You might want to use professional help to manage a large collectibles collection to ensure it remains performing.

Collectibles are physical and they can degrade. If you’re going to store your own collection you need to find out how to do it safely. Again, professional storage might be worth your while. Sometimes cleaning or repair is necessary - and sometimes it can damage your item and reduce its value.

Collectibles are portable. And they can be stolen. Take security advice. Or invest in storage.

You'll need to learn your way around certificates of authenticity if you want to collect stamps.

Collectibles need to be genuine. Forgeries aren’t common, but they do exist. You need to know enough to buy genuine items and you need to know how to assess condition and quality in your specialisations.

Invest in collectibles now

We are the world’s largest rare collectibles dealer, with world-class and class-leading collections in several areas.

We’ve picked out some investment ideas for you here.

And, if you want more advice like this, you want the latest from the collectibles scene, and you’d like to know when we get exciting new items then you need to sign up for our newsletter here. Many of our best items are sold to established clients long before we can list them on our website. Sign up, and you’ll never miss out again.