7 Tips for Using Collectibles as a Safe-Haven Investment

BY: MIKE FAGAN

In today’s environment of ultra-low interest rates, increased market volatility, and waning personal privacy – top quality, rare, and important collectibles offer a way to maintain, store, and transfer real wealth on a long-term basis and in a very private manner.

Here are a few tips for success:

#1: Buy What You Like

There’s lots of different types of collectibles. And because of that, we recommend focusing on buying what you like. If you buy what interests you, you’ll learn more and more about that specific niche – and you’ll be able to make better informed decisions as your knowledge grows.

#2: Stick with Major Markets and Major Items

To put it another way, don’t get too esoteric. It doesn’t matter how rare an item is if nobody cares. In collectibles, it’s not just rarity that matters. Demand is also an important issue. So stick with items people care about and collect.

#3: Quality Counts!

In all collectibles, quality is of paramount importance. Typically, the better the condition, the bigger the buyer demand, and the higher the price. Which means, in most instances, you’re best served by buying the best quality you can afford. Eye appeal matters!

#4: Think Long-Term

Collectibles markets are expertise-driven niche markets. These are not markets where you can “Beat the Dealer.” And unless you’re an expert dealer, you cannot be a successful short-term trader.

But you do hold a distinct advantage over the dealers. You have staying power. You don’t NEED to sell. You can buy great collectibles and hold them to ride the long-term trend. Dealers don’t do that because they’re in the sales business… not the storage business. They buy and sell. You can buy and hold as a safe-haven investment — so think long-term.

#5: Use Third-Party Grading and Authentication

As noted, quality is a major value component in the collectibles arena. And, obviously, authenticity is a must. Fortunately, many markets have third-party grading and authentication companies, such as PCGS, that can give you an unbiased expert assessment of the quality and authenticity of a collectible.

You don’t want to buy a “Very Fine” item for an “Extremely Fine” price. And obviously, you want to avoid counterfeits at all costs. Counterfeiters are extremely talented, and grading can be subtle and subjective. You really should have an expert opinion before laying down your hard-earned cash.

#6: Find an Expert You Can Trust

While third-party grading and authentication can help you make the right purchases, there are additional issues for which you can use expert assistance. Even items that have the same “official” grade can have slight differences… mostly due to eye appeal.

A true expert can guide you and make sure your purchases are of the greatest value possible. And experts can help you find and buy the right items… and for the right price. How do you find the right expert?

In my slightly biased opinion — there’s none better than Van Simmons.

#7: FOCUS, FOCUS, FOCUS!

Van often says, “The easiest thing to do in the collectibles market is spend your money!” Yet, all successful collectors have one thing in common… and that’s focus! The idea is to buy with purpose!

Simply by sticking to one or two general areas or genres, you’ll have no choice but to make “informed purchases” of important items as your knowledge base and buying and selling experience broadens.

Five Do-Nots for Collectibles

In general, you’ll be best served by adhering to these “5 Do-Not’s”

Do not buy items randomly. Remember, focus!

Do not buy “raw” items that haven’t been graded and authenticated by an expert third party.

Do not buy items from TV or online sellers; most often these are common, overpriced items.

Do not buy second or third editions; it’s the “firsts” that hold real value.

Do not overly focus on bargain hunting; if a price sounds too good to be true, it probably is!

The Rare Coin Advantage

The rare coin market – which is estimated at $8 billion in sales annually – offers a few key advantages over most other collectibles genres.

First, rare coins are, by far, the most liquid of all collectibles. It’s really easy to sell rare coins.

Second, the difference between buy and sell prices for rare coins is typically smaller than in any other collectibles genre.

Finally, rare coins maintain a direct correlation to gold and silver bullion markets.

Yours in profits,

Mike Fagan
Editor, Daily Profit Cycle

Mike Fagan has mining in his blood. As a teenager he staked countless gold and silver properties in Nevada alongside his dad, Brian Fagan, who created the Prospect Generator model that’s still widely used today in the resource space. One of those staking projects was put into production by a major Canadian mining company — a truly rare and profitable experience. That background uniquely qualifies him as a mining stock speculator. One of the most well-known names in the business, Mike is now putting that experience to use for the benefit of Resource Stock Digest, Daily Profit Cycle, and Hard Asset Digest readers.