Investment grade baseball cards – a Babe Ruth home run!
When we moved into our new home last year, my wife asked if she could throw out my (numerous) boxes of sports cards, carefully collected and stored over the past four decades. “No,” was my reply. “Why?” she asked. “Because,” I responded, “each of those boxes is worth a year of mortgage payments, and they’re appreciating every day.” Suffice it to say, she hasn’t raised the issue again since.
A Growing Investment Market
According to Jesse Craig, Director of Business Development at PWCC Marketplace, “Trading cards continue to show they are non-correlated assets that follow their own market trajectories…we have seen strong performance for the market from 2008 onward. The PWCC 500, specifically, is up 902% since 2008.” For those who aren’t familiar, The PWCC 500 Index is essentially the S&P 500 for trading cards. Jesse is not alone, consulting group Market Decipher projects the sports memorabilia category will soar from$26.1 billion in 2021 to $227.2 billion by 2032.
A Phoenix From The Ashes
Until the 1970s, sports cards were not generally viewed as investments, which is why vintage items in excellent condition can command astronomical prices today. By the mid-1980s, prices for contemporary cards were rising, and they were widely seen as sound – if speculative – long-term investments. Manufacturers responded by increasing production in the late 1980s and early 1990s, leading to market saturation and a subsequent price crash.
Card makers have since devised novel strategies to maintain prices, often offering limited 1 of 1, 1 of 20, 1 of 100, et cetera, editions. Modern day sports cards may include a scrap of a game-worn jersey, baseball bat, football, and countless other mementos that drive scarcity and therefore garner higher perceived value in the eyes of collectors.
As a result, the sports card market rebounded and flourished, especially during the Covid-19 pandemic when canceled sporting events and surplus cash from stimulus checks led fans to invest in collectibles. However, there was a noticeable decline last year; it is possible that higher interest rates made high-yield savings accounts and similar vehicles increasingly attractive, particularly for more conservative investors.
And yet, this downturn could represent an opportune moment to enter the market for many. Deciding what to buy and how much to spend can be challenging, given that collectibles don’t generate cash flow, earnings, dividends, or intrinsic value. As my wife exclaimed, “That piece of cardboard is worth what?!”
GOATS Lead the Way
“Buy the best of the best and the GOATs (Greatest Of All Time),” advises Chris Ivy, director of Heritage’s sports auctions, noting “exponential growth” in the prices of items linked to legends such as Babe Ruth, Mickey Mantle, Ty Cobb, Wayne Gretzky, Michael Jordan, Tiger Woods, Muhammad Ali, and Tom Brady. “Future generations will always know who Ruth and Jordan are.”
Howard Epstein, a Charlotte, NC-based wealth management advisor and lifelong sports memorabilia expert, agrees. “Buy the best you can afford” and “buy what you like...it’s best to stick with retired or deceased players” in top grades, Epstein advises.
Grading services like Professional Sports Authenticator (PSA) and Beckett evaluate collectibles for authenticity and assign a numerical grade from 1 to 10 to indicate their condition. Just as location is crucial in real estate, condition is key for most collectibles. A 1976 Topps Walter Payton rookie card with a PSA 10 grade sold for $41,000 in May 2024, while a PSA 1 graded card of identical vintage can be purchased for under $150.
“You can speculate on newer or current athletes; however, remember it is speculating,” Epstein warns. “They could have a career-ending injury or worse.” Your author is currently fighting back tears for all the money wasted when buying signed Julio Urias and Walker Buehler rookie cards. “Speculators typically buy items of highly touted young athletes, which can be expensive given their limited records. Speculators often lose money because most athletes don’t achieve long-term stardom,” continues Epstein.
Unlike spectators, collectors usually buy items they love without necessarily expecting a profit (though they often do).This approach is generally considered wise because, even if an item loses value, the owner still enjoys it. Collectors often keep items – especially those related to a favorite player, team or cherished memory – throughout their lives. “Baseball seems to still be kind, with basketball close behind, then football,” Epstein notes.
A New Way to Enhance Your Collection
aShareX empowers fractional bidders to compete alongside traditional 100% bidders for ownership of high-value alternative assets like a Babe Ruth baseball card in excellent condition, giving collectors and investors access to participate in the potential financial upside of a GOAT asset.
When fractional bidders win an aShareX auction, they receive shares representing their proportional ownership of the asset via an SEC-qualified share offering. aShareX stores and maintains the asset, provides shareholders with annual 3rd party appraisals so they know what their investment is worth, and offers shareholders the right to vote each year whether they want to sell the asset.
Practice Bidding with Babe Ruth
Do you want to see how investment and excitement come together for our auctions. You can develop bidding strategies ahead of time by using aShareX’s“Test Drive an Auction” TM. Finally, sports fans, enthusiasts, and investors alike can participate in this unique and thriving investment category.
To register for upcoming aShareX auctions, click here.
Leave a Comment