WHY COLLECTIBLES ARE A BAD INVESTMENT.

WHY COLLECTIBLES ARE A BAD INVESTMENT.

Collectibles is a broad term for describing antiques ,art ,autographs,baseball cards,cloaks,coins,comic books,dolls gems etc.I'm not trying to diminish contributions made by artists and others to the world culture but true assets that make your money grow such as real estate,stocks or a small business are assets that can produce income and profits while collectibles have little intrinsic value and is exposed to the whims and speculations of buyers and sellers.Here are reasons why I strongly believe collectibles are a bad investment.

1.Markups are huge

The spread between the price that a dealer sells the object and the price that he buys it is usually huge,often a 100 percent,sometimes even greater.So your purchase must typically double at minimum just to get you back to even.

2.You can get stuck with a pig in a poke.

Sometimes you can buy a forgery or even overpay for a collectible because you don’t realize an imperfection inferiority of an item.

3. Your pride and joy can deteriorate over time.

Damage from humidity ,sunlight and fluctuating temperatures and a whole host of vagaries can ruin your collectible.

4.Lots of other costs add up.

Some collectibles incur a host of other costs ie if you buy more expensive pieces you may have to have them appraised you may also need to pay storage and insurance fees.

5.The returns stink.

Ignoring the substantial costs of buying,holding and selling,average returns that investors earn from collectibles barely keep ahead of inflation and are generally inferior to stock market,real estate and small business investing.

Finally you can find out about a specific type of collectible to became a better investor but you are going to have to be among the best to have a shot at earning decent returns.