The Truth About Collectibles
Have you heard the story about the guy that buys a small painting at a yard sale for $25 only to figure out it’s a lost Monet or Picasso painting? Many of us fantasize about yard sale finds being highly collectible items that will net us enough money to retire.
Collecting is one of those hobbies everyone does to some extent. From comic books to designer purses we all acquire goods we deem to be highly collectible in the hopes that it will be worth significantly more down the road.
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Unfortunately the harsh reality is that most of those ‘limited edition’, ‘highly-collectible’ items are bad investments that are really just expertly marketed fads that will never outsell their original retail price.
Consider, for example, Hummel figurines. My mother isn’t going to like hearing this but those adorably posed tots cowering below umbrellas or playing “ring around the rosie” aren’t worth anything near what they used to be.
Go to any little old lady’s house and you’re sure to see a curio cabinet filled with these cherub-like figurines. Unfortunately that’s the last generation that appreciated them. New collectors just aren’t interested in them.
The market for these porcelain statues has become increasingly over saturated because as the generations that collected Hummels dies off, there simply aren’t enough new buyers to keep up with supply.
These highly coveted collectibles once sold for hundreds of dollars apiece are now mostly found in lingering eBay auctions priced at $50 or less.
A similar fate has befallen Thomas Kinkade paintings. The artist once known as ‘America’s most collected living artist’ initially sold his paintings for thousands of dollars apiece. In the 1990’s there were 350 Thomas Kinkade Galleries sprinkled across the U.S.
But by 2005 his paintings had become so commercialized that nearly half of his galleries had closed. Today most collectors have a hard time even selling their once prized possessions.
Another victim of over-production is Norman Rockwell plates. My own grandmother decorated the top of her kitchen cabinets with these once sought after ceramic plates. Collectors believed the illustrations depicted on these plates would increase their value over time. In reality the images on these plates were reproductions of paintings that were widely viewed in magazines such as The Saturday Evening Post. If you’ve got a hankering for one of these plates you won’t have to look hard or spend a lot of money. Most plates sell for less than $5 on eBay.
Many collectors confuse fads or trends with something that will hold its value. Take for instance beanie babies. Collectors snatched up these animal shaped bean bags in the mid-nineties believing their initial $5 investment would later allow them to sell them for ten times that amount. Instead, the craze for these toys died down rather quickly and many collectors were left holding the (bean) bag on these bad investments. I remember when McDonalds had a promotion giving away beanie babies in happy meals. I had stopped by to grab a quick bite on my lunch break when a middle aged man offered me several hamburgers and fries. He had no desire to eat the 50 happy meals he had just bought, he simply wanted the toys.
The same thing happened to collectors of Cabbage Patch dolls. In 1983 the nightly news showed scores of videos of parents trampling each other just to get their hands on the hottest Christmas gift for their child. Collectors jumped on the bandwagon hoping to turn their initial $25 investment into enough money to pay for their child’s college tuition one day. Not surprisingly, their investment turned out to be fool’s gold. Now-a-days you’ll find these yarn-haired dolls lining the shelves of consignment shops and in countless eBay auctions selling anywhere from $1 to $27.
Another rule of thumb to collecting is that when a company labels something as “highly collectible”, it probably isn’t. The company Franklin Mint has had huge success over the years pulling this trick. They make everything from coins to toys cars. When a new collectible comes on the market they produce mass quantities of these items, advertise the heck out of them, label them as “limited edition” or “highly collectible” and start raking in the cash. Despite Franklin Mints claims investors never have been able to re-sell these items for more than they originally paid. The only exception to that rule seems to be coins which have been inflated due to today’s inflated precious metals prices, but even that won’t last very long. In fairness, Franklin Mint isn’t the only company out there that pulls this marketing trick on collectors. Other organizations like The Danbury Mint and Royal Copenhagen sell similar items that are as un-collectible now-a-days as Franklin Mints are.
The most important thing to look for when deciding if an item is collectible is rarity. Mass produced items will always fail to keep or even increase in value over the years. Take, for example, comic books. Anyone who has found a comic book collection collecting dust in an attic or storage locker has dreamed of selling it for boatloads of cash. That almost never happens, due in large part to the copious amounts of these short stories remaining in circulation. Comic books were highly collectible in the late eighties and early nineties, but today most are only worth the paper their printed on. The only ones that are collectible are ones that showcase first appearances of major characters like Batman or Superman.
There are exceptions to every rule. A beanie baby known as Peanut the royal blue elephant is worth as much as $5,000, while other rare versions of the bean bag toys have sold for hundreds, even thousands of dollars. One Norman Rockwell plate in particular from 1975 usually sells for about $100 online. And the original Barbie doll from 1959 is valued at around $8,000 today.
The most important thing to remember about collectibles is that they should not be perceived as a commodity. If you want to start collecting something, do it because it’s fun and brings you joy–not for investment purposes.
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