Is Investing in Sports Cards a Viable Investment?

Investing in sports cards has sparked interest among collectors and investors alike as the market for rare and iconic cards has grown into the billions. But are sports cards a good investment? The answer depends on market trends , the quality of the cards and the investor’s knowledge of the industry. While some have seen significant returns, sports card investing is not for investors seeking a low risk profile as it is part of a niche market that is not as reliable as traditional investments.

If you're considering alternative investments like collectibles for your portfolio, a financial advisor can help you analyze and manage investments.

What Are Sports Trading Cards?

Originally, sports trading cards were promotional items included in products like cigarettes and gum that featured pictures of famous athletes. They quickly evolved into a hobby for enthusiasts, with the first notable surge in popularity occurring in the early 20th century.

The golden era of sports cards began in the 1980s and 1990s when companies like Topps, Upper Deck and Fleer started producing autographed cards, memorabilia cards, and limited-edition prints. The umbrella of "sports trading cards" has recently expanded to include collectible card games such as Pokémon and Magic: The Gathering, which also feature cards with six-figure valuations.

How Much Money Is There in Sports Cards?

According to the consulting firm Market Decipher, the sports memorabilia market, which includes trading cards, was valued at $33 billion in 2022, and is projected to grow almost seven times in size by 2032 to roughly $227 billion .

Another global research firm, Kings Research , valued the sports trading card market specifically at $9.69 billion in 2022, and projected its growth to $20.48 billion by 2030.

This surge in value is largely driven by the increasing rarity of vintage cards, as well as the growing popularity of new, limited-edition releases. High-profile sales, such as the record-breaking $12.6 million sale of a 1952 Mickey Mantle card in 2022, highlight the potential for substantial returns.

The expansion of online marketplaces like eBay and specialized platforms like PWCC Marketplace have made it easier for collectors to buy, sell and trade cards, further boosting the market’s liquidity and accessibility.

Are Sports Cards a Good Investment?

Whether sports trading cards are a good investment depends on various factors, including the collector’s knowledge, the specific cards being invested in, and market trends. A financial advisor can provide additional insight as to whether or not they're a good fit for a portfolio. Sports cards can offer substantial returns, especially for rare, high-demand cards; however, investing in sports cards is not without risk. The market can be volatile and driven by unpredictable factors, such as an athlete's reputation, sudden changes in rarity due to undiscovered inventory and overall economic trends that affect collectors' disposable income .

Additionally, the condition of the card plays a crucial role in its value. Cards graded by professional grading services like PSA (Professional Sports Authenticator) are often worth significantly more than ungraded cards. But grading can be subjective, and the process itself involves costs. Storage and insurance can also affect the bottom line, and if you acquire a collection from a deceased relative you'll have the capital gains taxes on collectibles as well.

How to Buy and Sell Sports Cards

Here are four common places to buy and sell sports cards:

• Online marketplaces: Platforms like eBay and PWCC Marketplace are popular for both buying and selling. These sites provide access to vintage and modern cards, and allow users to reach a global audience. Sites like Facebook Marketplace and Craigslist can also connect buyers with bulk sellers who don't have the time for inventory or appraisal, creating the potential for high profit margins and rare discoveries.
• Card shows and conventions: These in-person events offer the chance to inspect cards firsthand and negotiate prices directly with dealers or other collectors. They also provide networking opportunities within the collector community.
• Local card shops: Brick-and-mortar card shops remain a valuable resource for both buying and selling. These stores often have knowledgeable staff who can offer insights into card values and trends. Selling to a shop may yield a lower price than direct sales, but it provides convenience and immediacy.
• Auction houses: For high-value or rare cards, auction houses like Heritage Auctions or Goldin Auctions attract serious collectors and can result in higher final sale prices, though they also charge significant commissions.

Tips for Investing in Collectibles

Investing in collectibles, such as sports trading cards, requires a strategic approach. Here are six general tips to consider:

• Research the market: Before investing, thoroughly understand the market for the specific collectible. Familiarize yourself with the key factors that influence value, such as rarity, condition and historical significance. Keep up with trends and market shifts.
• Buy what you love: While profitability is the goal, investing in items you have a genuine interest in can enhance your experience and reduce the emotional impact of potential losses. Passion for the collectible can also lead to better decision-making.
• Focus on quality: Condition is crucial in the collectibles market. Invest in items that are in the best possible condition and, when applicable, consider professionally graded items, as they typically command higher prices.
• Diversify your investments: Just like in traditional investing, diversification can reduce risk. Don't put all your money into one type of collectible or item. Spread your investments across different categories or items.
• Be patient: The value of collectibles can fluctuate over time. Patience is key; long-term holding often yields better returns, especially for rare or highly sought-after items.
• Consider storage and insurance: Protect your investments by storing them properly and considering insurance to safeguard against damage or loss.

Bottom Line

Sports cards can be a good investment, but require careful research, patience and a keen understanding of the market. While there is potential for significant returns, especially with rare and well-preserved cards, the market’s volatility and the risks involved mean that sports cards should not be the primary asset in a diversified investment portfolio .

Tips for Investment Planning

• A financial advisor can help you create a personalized investment portfolio based on your needs and goals. Finding a financial advisor doesn't have to be hard. SmartAsset's free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you're ready to find an advisor who can help you achieve your financial goals, get started now .
• If you want to figure out how much money an investment could make, SmartAsset's investment calculator could help you get an estimate .

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