A surge in sports card investing has many people excited about this lucrative opportunity in the past few years.
Perhaps it's nostalgia, the general love of sports betting, or the fun of figuring out the scarcity of the supply-and-demand of sports cards that has piqued this interest.
This is a guide for people who want to learn how to invest in sports cards.
While the majority of cards will not have high monetary value, although they may have a lot of sentimental value, some cards could pay large dividends if you understand the marketplace and how to invest.
How Do You Get Started in Sports Card Investing?
The first step is to search for a reliable vendor. This will allow you to join a primary platform for buying sports cards. Start with some research to help identify and narrow down the field.
know how the current field of players is performing. This background knowledge will be the foundational basis to develop your instinct on picking cards with the highest value.
Approach sports card investing like investing in any other type of asset. By definition, an investment is an asset purchased with the aim of generating increased returns after a certain period of time. Therefore, select your cards with this goal in mind.
Understanding a sports card collectors mindset will also help you select cards with the highest potential value.
Why Short Term Card Investing Can Be Lucrative
Before the COVID-19 global pandemic, the sports card trading world had demand outpacing the supply. However, with many sports on hold because of social distancing restrictions, the marketplace has flipped with demand slowing. While this does not make it a great time for short term card investing, it is still possible.
Only spend what is within your means. But with more people online, shopping, and trading, there is a lot of supply available.
While there are inherent risks with short term card investing, the barrier to entry is lower. For example, you could purchase a card for $5 and flip it for $10 to get 100% back on your investment.
Why Long Term Card Investing Is A Smart Idea
On the flip side, long term card investing can be smarter with bigger payouts, but playing the long game takes resources and time. It is obviously more expensive to do long term card investing, but you may find it is sustainable if you look at the bigger picture.
When investing with a long term mindset, make sure to add some parameters around your investment strategy.
Ask yourself these questions to decide if the investment is worth it:
●How long has the player been in the league? For long term investors, it is not worth investing in rookies. If the player has safely reached his or her third or fourth year, then consider investing.
●How prone is the player to injuries? Could the player get a career-ending injury, which would impact the value of the card?
●Will the player become a generational icon in the game? When investing long-term, think beyond this season and the next.
Are Graded Cards Better?
Graded cards are a system for quality control.
Beckett Grading Services (BGS), Professional Sports Authenticator (PSA), and Sportscard Guaranty Corporation (SGC) are the primary providers of card grading services. The Beckett Grading Services is most popular for modern cards, but if you prefer to trade vintage cards, then try using Professional Sports Authenticator.
These service providers will evaluate your cards based on these elements:
A third-party company will give you a grade for each card's trait and also an overall grade between 1-10. If the final grade is 9 or higher then the card is known as "Mint 9." This translates to the card being in excellent condition, almost as if it came straight out of the pack. "Gem-Mint" is a 9.5 grade, which is as close to flawless as possible. "Pristine 10" is the perfect card. This high range of quality is what most collectors aim for.
After authenticating and grading the card, the company will seal the card in a tamper-proof holder.
If you are selling a graded card, you'll likely get more interest from serious buyers. If you are investing long term, then you will probably want to have your cards graded. If you are buying, take the card's grade in your internal calculation to determine if the investment is worth it.
If you bought cards that are not graded, take the extra step to store the cards properly. After all, it is an investment. It is recommended to store cards in a penny sleeve and a toploader to protect its quality. If you've invested in the card, make sure you are caring for the card too.
Card Collecting Tips
Many investors are collectors. Likewise, many collectors are investors. In some ways, it is a similar hobby with different end goals. An investor aspires to gain monetary compensation while a collector wants to be fulfilled, to complete a set or get their favorite player like for some Mike Trout. Investing in Mike Trout can be for fun or financial gain.
In both hobbies, you are card collecting, just with different mindsets and goals.
Check out sites like Card Ladder, which is a modern price guide for sports cards. Knowing the card's price will help with your negotiating, regardless of whether you are buying or selling.
Why is Card Collecting a Good Investment?
Unlike stocks, sports cards are not likely to dip down as far as a financial crisis such as the 2008 bubble, but the gains are not as high and steady as the S&P 500 index fund's overall performance.
In this way, trading cards are a calmer marketplace to invest in. This activity also helps you reach your financial goals while enjoying your favorite sport.
The sports market is thriving, just look at the salaries of players as an indicator. This means the tangent card collecting and card trading market is thriving. Therefore, card collecting and trading will continue to be an activity many enjoy. Join the game!