When it comes to collecting, the motivation behind why we acquire certain items often sparks a philosophical debate. Do we collect things because we truly enjoy them, or are we driven by ego, treating them as trophies to showcase our wealth and status? This question can be applied to anything—whether it’s coins, art, baseball memorabilia, or rare collectibles. However, there’s a crucial point to consider: the future value of these objects, especially when significant amounts of money are invested to add them to a collection.
The Value of Collectible Coins: A Reliable Market?
Collectible coins, as a hobby, offer a level of sophistication that allows for relatively stable value tracking. The market for coins is well-established, with many coins known from multiple examples. Take, for example, the 1804 Draped Bust Heraldic Eagle silver dollar, which is known in only 15 pieces. This gives collectors a clearer sense of rarity and demand. However, when it comes to truly unique items, the value can fluctuate wildly. Former Federal Reserve Chairman Alan Greenspan’s term “irrational exuberance” comes to mind when considering the price bubbles that sometimes occur in these markets.
Art and Other Unique Collectibles: Unpredictable Value
Unlike coins, fields like art or baseball memorabilia can be far more volatile. Sotheby’s, one of the world’s leading auction houses, regularly auctions rare and unique pieces of art. But as seen in the September 2020 Contemporary Curated auction, even esteemed works of art can fail to sell. Twelve percent of the 122 lots went unsold, highlighting the unpredictability of the art market, which has been in a downturn, according to reports from The Wall Street Journal and Bloomberg. The same unpredictability applies to memorabilia, such as Shohei Ohtani’s 50th career home run baseball. While it holds value now, its future price is uncertain, particularly if another player surpasses Ohtani’s achievements.
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Collecting with an Eye on Resale: Coins Offer More Predictability
Ultimately, whether an item is collected for enjoyment or as a trophy, it’s likely that many collectors also consider its resale potential. The future value of collectibles often depends on their rarity, demand, and the market trends. If you’re looking for a more reliable investment with less risk of irrational price swings, coins may be a safer bet. Art and other unique items can still provide excitement and prestige, but they come with a higher degree of market risk.