As Major League Baseball’s greatest players prepare to descend upon our nation’s capital for the 2018 edition of the All-Star Game, the baseball card market continues to solidify itself as a destination for discerning investment dollars. Even Wall Street’s most astute money managers would likely be stunned to learn that the high-end vintage baseball card market has outperformed the S&P 500 over the last 10 years – it’s not even close!!. If you have an interest in investing in these cardboard treasures, here are five tips to help you get into the game.
1. Buy Only PSA Graded Cards
With the emergence of a generally accepted third party grading service at the turn of the century (Professional Sports Authenticators – PSA), trading cards have become more commoditized and liquid as investments. In fact, PSA maintains real-time, accessible inventories of the grade populations for each card ever graded that enable more sophisticated supply and demand analysis. Accordingly, more and more “professional” money has entered the vintage trading card arena and contributed to the consistent, escalating prices.
2. Scarce/Elite Cards Get Top Dollar.
Investors have consistently shown the desire to pay top dollar for the scarcest and elite sports trading cards. With so many of these rare, high-grade housed in personal collections and not on the sales block any time soon, the opportunities to bid on many of these elite cardboard classics can be extremely limited and lead to auction bidding frenzies when one finally comes to market. Accordingly, the top-graded iconic cards that have a grade population of less than fifteen total cards in circulation are your best bet. In a bull market, this strategy likely mandates sometimes paying well above previous sale records for a like-graded card.
3. Avoid post-1970s Cards.
In general, new trading card investors should use caution if allocating money toward any post 1970-cards, as the market is saturated with these cards in elite condition. As collectors began to learn the potential monetary value of their cards, more and more cards were transferred straight from packs and into protective cases and sheets – rather than in the spokes of bicycle wheels. The end result is that the newer the card, the more likely it was immediately preserved for resale purposes. As far as new cards being released today, the trading card companies have tried to artificially create some level of scarcity with serial numbering, autographs, uniform patches, etc. While these limiting elements can have a positive effect on supply, the challenge is that there are so many issues and variations for each player out there, that the demand for any specific card is greatly reduced.
4. Invest in Sports Pioneers.
Iconic sports pioneers represent the greatest upside in the long-term. Pioneers like Jackie Robinson, Jim Thorpe, Hank Greenberg, Roberto Clemente and Satchell Paige will only increase in prominence over time and fuel record card prices. Records will always be broken and there will always be another home run crushing phenom or unstoppable running back. Pioneers, however, will always remain the first to do something and there legend will only climb to seemingly mythical proportions in years to come.
5. Baseball cards rule, but other sports have potential and offer lower entry price points.
Relative to baseball, which has always been the gold standard in sports cards, football and basketball cards sell at a much lower multiple to their baseball counterparts. As younger fans age into the sweet spot of trading card investing, over time we should see the shift in fandom from baseball to football and basketball begin to be reflected in the appreciation of trading cards. Bill Russell, Wilt Chamberlain, Jim Brown, Johnny Unitas and Bart Starr rookie cards represent significantly lower investment entry points than comparably elite baseballs legends from the same era.