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Is selling baseball cards profitable?

Elementary-finance.com is kicking off their series about alternative investing.  Today we’re going to tackle the subject of selling baseball cards.  Baseball cards can sell for a few cents or thousands of dollars so it would only make sense that it could be more than a hobby, or at least we would think so.  Let’s see if that’s true.

It is said that the highest valued baseball cards are valued at $40,000.  Robin Roberts, Jim Konstanty and Eddie Stanky were withdrawn from the series in 1952 due to contractual problems with a rival baseball card company.  It is not known how it happened but somehow a small amount of these cards found their way in to circulation and because of that mistake, these cards are the highest valued cards.

There are many sports cards that can catch more than $1,000 in the market but we still haven’t answered the question:  Is selling baseball cards worth an investment?

Often, we only think of investments as stocks, bonds, mutual funds, etfs, and other paper investments but it’s important that we also think outside of Wall St.  Anything that appreciates in value is an investment.  Classic cars, art, and even Beanie Babies are collectables and could be considered an investment.

In order for us to evaluate baseball cards, we have to answer a few questions.  First, like a stock, how much upside?  After selling baseball cards that have been held for a period of time, did we make more money holding these cards or would a savings account or CD have made us more money?

Next, how does supply and demand look?  Are there more baseball cards on the market than there are people looking to buy or is the supply and demand either balanced or more demand heavy?  Last, is the amount of time it takes to make money selling baseball cards justify the cost?

Taking a look at our first question, baseball cards can be a good long term holding but most are not.  While a few cards may appreciate to high values, most will not and in order to own a high value card, you will either have to buy a card that is already valued high or have some very specialized knowledge that allows you to recognize a card that will be worth a lot in the future.  Unfortunately, selling baseball cards doesn’t pass the test of our first question.

Second, supply and demand.  Because this is considered a hobby, the market for baseball cards is quite specialized.  While supply and demand appears balanced within the hobbyist community, it doesn’t appear to have a lot of appeal outside of there.  This requires the investor to have ties to the hobbyist community.  Without that, this probably doesn’t make for a good investment.

Last, talking to the baseball card enthusiasts, it is clear that true wealth belongs to the select few.  The experts who have specialized and are buying and selling baseball cards full time.

If you love your baseball card collection, the facts are clear.  Rather than selling baseball cards as an investment, do it as a hobby and have a lot of fun.  For investments, look elsewhere.

Tim is the author of the blog, elementary-finance.com. The goal of this blog is to educate those who have a desire to learn the basics of finance.

Article Source:http://www.articlesbase.com/personal-finance-articles/is-selling-baseball-cards-profitable-1055198.html

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July 21st, 2009 | Category: Personal Finance | Comments Off
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