Profit From Collectibles

	A Business Lunch(box)

Collecting is in a bull market these days.

Due to the popularity of shows such as PBS' "Antiques Roadshow" (with 16 million viewers), and the advent of Web auction sites like eBay EBAY, more people than ever are getting into collecting.

So are collectibles a good investment?

Can you expect a better rate of return than from other investments, such as stocks or bonds?

Keep reading -- the answer is yes and no.

Investment Potential

Buying collectibles can be a good investment, but it can also be risky, just like the stock market.

If buying at the peak of an items' popularity, you could find yourself holding a collectible worth less than you paid for it (remember Beanie Babies?).

Speculation can create an artificial bubble in a market that inevitably bursts, like in the case of baseball cards in the 1980s, when collectors were buying everything offered for sale with the hopes that prices would double or even triple within a couple of weeks.

But if you follow your passion, along with the right steps, you can have an investment that appreciates.

Can you expect a better return on your investment than the stock market? Financial publication Kiplinger's figured this out: "In 1929, a beautiful Chippendale highboy sold at auction for $44,000. If that same chest of drawers came on the market today, it would probably sell for well over $3 million.

"But think about this: even at such a fabulous price, the highboy would have earned just 7% a year, a return that was easily exceeded by the 10% average return on quality stocks over the last 60 years."

So it's up to you to determine whether you would rather buy and enjoy a Chippendale highboy for the long term or hold Google shares.

Collect What You Love

Before you start collecting vintage posters, Tiffany silver or Nippon porcelain, you need to ask a few questions.

Do you have an interest in what you're collecting?

Would you be happy if none of it sold and you had to look at your collection all the time?

For example, I collect WWII Japanese military artifacts and I sell these items through eBay.

When an item fails to sell, I'm not depressed; I love what I collect and don't mind holding onto a sword or helmet.

The holy grail of baseball cards, a near-mint condition 1909 Honus Wagner tobacco card, just sold for a record-setting $2.35 million.

The seller, Brian Siegel, commented that "the Wagner card gave me a tremendous amount of pride, excitement and pleasure" while he had it.

Siegel purchased it in 2000 for a then-record $1.265 million.

So determine what it is you're interested in, whether comic books, Mickey Mouse memorabilia, fountain pens or corkscrews, and then do your homework.