Defying a Recession
You hear and see it everyday. On the news, on the street and on the internet, the word recession has come to dominate headlines and conversations across America. Real estate has been going down and unemployment is going up while the US dollar continues to lose its strength. All of this is happening as we approach a crucial Presidential election. Of course, none of this is news to any of you.
The pertinent question here is ... how has all of this affected the hobby?
Amazingly, at least when it comes to quality material, the hobby has remained relatively unaffected by the recession. After a typical spring auction season, with thousands of high-quality lots up for sale, the results defied the economy. The prices realized were, at worst, healthy and, at best, tremendous. Many price records were set on a diverse selection of items, offered by various auction houses.
You may be thinking, how is this possible when basic necessities like loaves of bread and gas continue to increase in price, leaving the consumer with less and less disposable income? It may seem to defy logic at first but, if you break it down and really think about it, it becomes apparent how the market for high-end collectibles can survive such tough economic times and, in some cases, actually thrive during such times.
Below are three key reasons why great sports collectibles remain strong in a weak economy.
1) Emotional/Sentimental Connection – Other traditional forms of investment such as stocks and bonds are just that – a strict investment. What sports collectibles offer, in addition to investment potential, is that emotional or sentimental appeal. People do not stop rooting for their favorite team or idolizing their favorite players simply because the economy is suffering. That connection remains as does the drive to seek out one of their favorite endeavors – collecting – the escape hobbyists all crave.
2) Proven Track Record – Once again, there are plenty of traditional investment opportunities, some of which offer better returns than others. When it comes to quality sportscards and memorabilia, the overall performance of the market rivals and, in many cases, has often outperformed traditional investment strategies. All you have to do is take a look back 10, 15 or 20-plus years and you can see all the incredible buying opportunities. If we only knew then what we know now. Well within the last decade, you could have purchased a T206 Honus Wagner in Poor condition for around $25,000-$50,000. The last one sold for over $300,000.
3) Less Volatility – Like any market, the market for sports collectibles goes up and down. In some cases, price fluctuations can be great. That being said, in comparison to other markets, ours appears to be less volatile. Much of that has to do with number one on this list. The emotional/sentimental factor helps guard against huge swings, at least in some cases. Even within a week or two after 9/11, there were tremendous prices still being paid at auction. That's right, even soon after 9/11!
The bottom line is that our market has persevered and the three points above are just part of the story. Through good times and bad, collectors have refused to surrender their passion, the hobby that has been so rewarding for them. The future looks bright, even during gloomy days.
Never get cheated,
Editor In Chief
Copyright © 2014 PSA – A Division of Collectors Universe. Nasdaq: CLCT. All rights reserved.