Profit From Collectibles

Like any investment, collecting needs to be backed with prudent research.

• Find out what people are buying and what you need to look for. Join a collector's club and get its newsletter. Go to collectibles shows and talk to dealers and collectors.
• Buy some reference books and price guides about your collectibles. While the prices are usually dated by the time they're published, comparing the prices in annual guides help you deduct trends -- whether they're moving up, down or sideways. Read up on condition so you'll know what to look for.
• Go online and search out auction ads and the chat rooms of like-minded collectors, and see what people are buying and bidding on. Use this information to learn about the current prices of items.
• Always buy items in the best condition you can afford; don't be afraid to spend the money. The pieces that will appreciate the most are those in the best condition. An item in poor condition that costs $10 will probably be worth $15 in ten years, while one in mint condition that costs $100 could be worth $1,000.

Finally, be aware of collecting's downside: disposing of items.

Selling a stock is easy; to sell a collectible collection, you need a venue -- whether an auction house, like Sotheby's or Christie's, or online at eBay or Yahoo! YHOO -- and this sale process takes time. And while some pieces could bring you big money, others may never appreciate in value.

What's Hot

Trends in collectibles right now stem from baby boomers with disposable income who are looking back at their lives -- they like to collect items from their past with sentimental value.

Here are some collectibles that are not only fun to own, but also have investment potential.