Trading cards a viable form of alternative investment?



  • Are trading cards a viable form of alternative investment

    Hi, I’m researching trading cards as a form of alternative investment. With this pros and cons post, I want to get your opinions on whether trading cards can be a viable form of investment. Since I was young, I have been playing and collecting many trading card games like Pokemon, Yugioh, Cardfight Vanguard and Magic the gathering. I remember spending $30 on a single card just to upgrade my deck. Even as an adult, I have friends that stock cards up to sell when the time is right. Now, you might say, what the sugar, honey, ice and tea, trading cards are for little kids and there is no way to earn money from printed cardboard. So, with this pros and cons post, I hope that I can get you to know more about this topic.

    Pros

    1. Active card community and longevity of card games
    Card games like Magic The Gathering, Pokemon and YuGiOh have been around for more than 20 years and have amassed a strong international following of all types of people. This ensures these card games will be around for a long time to come and that there will always be people interested in these cards no matter as players or collectors, safeguarding your investment and making sure they last.

    2. No barriers to entry
    There are no barriers to getting into collecting and selling cards. With the popularity of card games, there are many vendors that sells these cards. Unlike other forms of alternative investing like watch investing, these vendors do not discriminate in factors like age, appearance, experience, wealth. You can buy buying booster packs from your local card shop or convenience store for a couple of dollars to start looking for rare cards to sell.

    3. Low cost, high reward
    The best thing about trading card investment is that there is no price discrimination when buying cards. At a couple of dollars, no matter what’s in the packs all booster packs of the same set cost the same price. Cards like “Black Lotus” and “Base Set Holo Charizard” that resells for tens of thousands of dollars all costs the same retail price in the booster packs.
    Just for a couple of dollars for a booster packs, you can get a profit of more than ten times.

    Cons

    1. Volatile
    There are many factors that affects the pricing of a card and thus makes card prices volatile and unstable. I will look into three of these.

    • Meta
      In the context of trading cards, meta means the main strategies of the card game in the period. The cards that fits into prevailing meta will rise in price and vice versa. Often in card games, the meta changes with each new set of cards that come out every few months. This can cause cards to suddenly drop in value and destroy your investment plans.

    • Banning cards
      When it is found that there is a card that is too strong and makes the game unfun, the game makers ban or restricts these cards to improve playing experiences.
      Being restricted or unavailable to use in play, the price of these cards will take a dive till they are unbanned or unrestricted.

    • Card condition
      The card condition matters greatly with the price of the card. If you were a collector, would you want to spend $9,000 after this? These cards after being damaged can lose up to 90% of its value. The card condition is so prevalent that hardcore collectors would unpack booster packs with gloves to ensure that the cards stay in their mint condition. As a guide, there are many ways to check a card’s condition. The first is a visual check that you can do yourself by deckbox.org another way is by sending it to Beckett Grading to get the card graded.

    2. Low liquidity
    According to Investopedia, Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market at a price reflecting its intrinsic value. In other words: the ease of converting it to cash. When looking at trading cards, with cards being reprinted en masse they are likely to drop in value in the long run and have low liquid value.

    So, what do you want do you think, are trading cards a form of alternative investments, have you played trading cards before, and do you think trading cards can be a viable form of alternative investment?



  • I used to play Magic the Gathering competitively. Seldom do so nowadays but I do collect selective cards at home.

    I agree with you with regards to the pros and cons of trading cards as a form of investment, especially with the recent unbanning of Stoneforge Mystic in Modern format that caused its market price to move up a lot.

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  • @limjimmy wow you used to play magic competively. What format do you play? Personally, I play casual commander only haha



  • @jie-koh-yang I play mostly constructed formats, in particular Modern and Legacy.



  • Interesting.... Have you made any money from selling @jie-koh-yang ?



  • @chekmeng hmm it isn't alot of money, but whenever I play a game format called prerelease, where I get a number sealed packs from a newly released set and play with the cards in the packs in a competition to win more packs, I tend to sell the cards I got to either earn a little money or break even.
    The prerelease costs $30 to $45 to participate.


 

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