Gold prices are finally doing better. But late last year, they weren’t. A report from The Telegraph went viral when it claimed that many Lego sets — if never opened and purchased in the year 2000 or later — yielded more value for their owners each year than the gold investments. Teen Vogue followed suite with a report that luxury retail site Baghunter conducted a study comparing the S&P 500, gold, and Hermes Birkin handbags over the past 35 years. The average yearly increase in value for the handbags was 14.2% – better than most traditional investment vehicles. Mashable added to the list with Star Wars action figures, My Little Pony sets, and factory-sealed Game Boys.
Before you sell all your gold and diversify your portfolio with collectible toys, there are some factors you should consider. For example, collectibles only fetch top-dollar if they are in mint condition. Gold bullion (and gold-backed investments, like ETFs) is worth the same no matter its condition. Also, collectibles are only worth what someone is willing to pay for them. If the popularity of Lego sets decreases, so does their value. Gold on the other hand, is a globally agreed upon store of value – plus it’s an extremely useful raw material, so there will always be a demand for it.
Investing in collectibles is also more difficult than investing in gold. One must have the foresight to predict what will still be in popular demand decades from now to keep from ending up with a bunch of Beanie Babies or 90s-era comic books. Since gold is always in demand, it’s great for portfolio diversification and hedging against other investments. The marketplace is also easier to operate in – it’s incredibly easy to sell your gold for a good price, but not so much establishing a deal with a collectibles buyer. There’s no harm in buying some collectibles as a hobby. But traditional investments like gold are most definitely safer havens over the long term.