Browsing Category

Articles

How I Stacked $1,200 of Premium Silver at Spot

How I Stacked $1,200 of Premium Silver at Spot

I originally wrote this article during early 2020, before the global pandemic ushered in a period of widespread silver bullion shortages and accompanying crazy high silver premiums.  Consequently, the advice contained in this article about buying silver at spot is no longer fully functional.  Regardless, I decided to publish it anyway for two reasons.

First, it is an important window into how the retail silver stacking market historically worked prior to March 2020 (and how quickly that all changed).  Second, it is possible that premiums on silver will normalize at some indeterminate point in the future.  If this were to happen, my article on stacking premium silver at spot would be a great step-by-step how-to guide.  Even with today’s elevated premiums, adopting the strategy below might still offer the savvy silver stacker a way to accumulate precious metals relatively cheaply.

So without further delay, here is the original article with only minor edits.

It is maddeningly obvious that the world is careening towards a financial crises/monetary reset of some description.  Because of this, I find it prudent to diversify my dollar holdings into something other than paper assets like stocks and bonds.  That something else is usually tangible assets like antiques, art and gemstones.

But as much as I like antiques, there is a certain simplicity to purchasing raw bullion as a fiat currency alternative.  Gold and silver have been treasured by mankind since the dawn of history.  They have also served as an immutable form of money for that same length of time – about 5,000 years.  So you can be sure that they will still hold their value during the next financial crisis, regardless of when it comes and what form it takes.

Now what if I told you that there was a way for you to buy silver at spot?

Under normal circumstances this is impossible.  The spot price is typically a purely theoretical price available only in the paper futures market.  The average person can’t actually buy physical silver at spot (or any other precious metal, for that matter).  Instead, coin and precious metal dealers will mark up their inventory by a small percentage in order to cover overhead costs and give themselves a modest profit margin.

The only exception to this rule is some online dealers who will offer a small quantity of silver – usually 5 or 10 troy ounces – at spot for new customers only.  So if you’re willing to sign up with a bunch of different online precious metal dealers, you can expect to get between 30 and 50 ounces of silver at spot (Ed. Note: To the best of my knowledge, only SilverGoldBull still has a silver at spot deal intermittently available).

But this strategy is both inconvenient and limited.  You’ll never get more than a few dozen ounces of the precious white metal at the going spot rate using this technique.  And the dealer gets to choose the type of silver you’ll receive.  As a result, you’re pretty much guaranteed to receive generic bars or rounds, which is the cheapest, least desirable kind of silver available.

But what if I said there was a way to buy hundreds of ounces of silver at spot?  And that some of that silver would be premium silver of your choice?

It almost sounds too good to be true, doesn’t it?

But it isn’t (Ed. Note: Well, it wasn’t too good to be true before March 2020).  In fact, I bought myself $1,200 worth – about 67 troy ounces – of silver at spot over the past few months (in late 2019) using this little-known technique.

How does it work?

The key is eBay Bucks, an incentive program offered by the online auction giant that only U.S. and Canadian residents can sign up for.  Under normal circumstances, 1% of the purchase price of an item sold on the eBay platform is rebated to the buyer in the form of an eBay Bucks coupon.  But this amount is often enhanced to 5%, 8% or even 10% during special promotional periods.

EBay Bucks accrue from your purchases until they are paid out in the form of a voucher at the end of each quarter.  This eBay Bucks voucher (which expires 30 days after being issued) can then be used toward the purchase of anything for sale on the auction site, including bullion.

For those who are interested in all the gritty details surrounding eBay Bucks, I suggest you read my article titled “Buying Bullion at Spot with eBay Bucks”

So here is the story of how I bought $1,200 of silver at spot.

First I signed up for the eBay Bucks program; the strategy obviously won’t work if you aren’t signed up.  Then I waited for a 10% promotional eBay Bucks period.  EBay typically offers these promos once or twice a month, so you likely won’t have to wait long (Ed. Note: Since COVID-19 hit, eBay has restricted its promotional eBay Bucks bonuses to only 5% – still worth it though).  However, the incentive period usually only lasts for 48 to 72 hours, so you have to pay attention or you’ll miss it.

Then I searched for pre-1965 U.S. 90% junk silver coin rolls for sale.  I personally prefer to use eBay’s “Buy-It-Now” option even though it is often marginally more expensive than the traditional auction format.  I favor “Buy-It-Now” listings because it means that I can complete the entire transaction in just a few minutes.  More importantly, I can be assured that I will be able to pay for the item before the end of the eBay Bucks promotional period, which is necessary in order to receive the enhanced eBay Bucks accrual.

In my case, I bought 5 rolls ($50 face value) of mixed Walking Liberty and Franklin half dollars for around $142 a roll, or just under $710 in total.  Minted between 1916 and 1947, Walking Liberty half dollars are widely considered to be one of the most beautiful coins ever struck in the United States.  In fact, the design was so recognizable that it was resurrected in the mid 1980s for use on the 1 troy ounce American Silver Eagle bullion coin.

Franklin halves minted between 1948 and 1963 are also quite attractive, with a distinctly Mid-Century aesthetic.  They are some of my favorite junk silver coins, and are underappreciated in my opinion.

 

Pre-1965 U.S. 90% Silver Coins for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

When I bought these 5 rolls of junk silver, eBay was offering 10% in eBay Bucks.  So I accrued a nearly $71 rebate on the purchase.

After waiting a few weeks, eBay had another 10% promo period.  This time I bought $30 face value of silver Roosevelt dimes for a bit under $141 (per $10 face value), or $422 in total.  Roosevelt dimes were first minted in 1946 in honor of President FDR, who died in office in 1945.  They were struck in 90% silver through 1964, when their composition was changed over to the cupro-nickel clad alloy that is still in use today.  I accrued about $42 worth of eBay Bucks on this purchase.

When the end of the calendar quarter came, eBay issued me an eBay Bucks voucher for $113.  Now it was just a question of waiting for the right bullion deal to come along.

EBay is careful not to offer eBay Bucks incentive periods in the month following quarter end.  This is to keep you from double dipping by using your eBay Bucks voucher during a promo period (they stack).  The only exception to this is October, when they will typically offer an eBay Bucks promo toward the end of the month.  I suspect they do this because it is at the beginning of the Christmas buying season.

In any case, I opted to ignore the possibility of double dipping on another eBay Bucks incentive period.  Instead, I chose to use my voucher to buy something from eBay’s “Bullion” category.  Items purchased from the bullion category don’t accrue eBay Bucks, but you can redeem eBay Bucks vouchers on them.

Now I like premium silver – the good stuff.  Unfortunately, premium silver is invariably more expensive than generic silver.  But to me, paying a little bit extra for a higher quality product is well worth it.

That’s when I saw it.

Scottsdale Mint was having a sale on its gorgeous 10 troy ounce Scottsdale Stacker silver bars through its eBay store.  They were being offered for only $1.48 per ounce over spot.  This was a phenomenally good deal, especially for such a high quality silver bar.

The Scottsdale Mint is an Arizona-based firm known for producing some of the finest premium silver available on the market.  They have been contracted to strike legal-tender collectible coins for many smaller sovereign nations, including Fiji, Barbados and Cameroon.  So this is a company with tight quality control and a stellar reputation.

Scottsdale Stacker silver bars are precision machined in the U.S.  Each one comes with a unique serial number and an anti-forgery, engine-turned design emblazoned on the reverse.  And they typically cost you about $3 an ounce over spot, even if you buy them directly from the Scottsdale Mint website.

They are exactly the kind of premium silver that I love.  So $1.48 over spot was too good a deal to pass up.

I quickly pulled the trigger, purchasing a single Scottsdale Stacker silver bar for $190.  But because I used my $113 eBay Bucks voucher to pay for most of it, my net cost was only $77.

Now I understand that all these numbers can be overwhelming.  So I’ve distilled my experience down to an easily digestible table that you can peruse at your leisure.

 

Face Price Spot at
Value/ Troy Per Time of
Description Count Ounces Cost Ounce Order
90% Silver Walking Liberty/Franklin Halves:  $50 35.75  $709.70  $19.85  $18.04
90% Silver Roosevelt Dimes:  $30 21.45  $422.19  $19.68  $18.00
10 Tr. Oz. Scottsdale Mint Stacker Bar: 1 10.00  $189.90  $18.99  $17.51
Total Cost Before eBay Bucks: 67.20  $1,321.79  $19.67  $17.95
eBay Bucks:  $(113.19)
Total Cost After eBay Bucks:  $1,208.60  $17.99

 

I’ll leave you will a short summation of my silver buying spree here.

I ended up purchasing $50 face value of Walking Liberty/Franklin halves, $30 face value of Roosevelt dimes and one 10 troy ounce Scottsdale Stacker silver bar.  All of these purchases together totaled 67.2 troy ounces of pure silver (junk silver is calculated at 7.15 troy ounce of fine silver per $10 face value).  My total cost was only $1,208 (and change).  The spot price of silver during my purchases fluctuated between $17.51 and $18.04, with a weighted average price of $17.95.

The total cost per ounce for my 67.2 ounces of silver was only $17.99 – a mere 4 cents over spot!  Now if you’re buying silver at spot, you’d normally expect to only receive low-premium generic silver.  But that wasn’t my experience.  Instead, I mostly bought silver half dollars (which always trade at a small premium to silver dimes and quarters), along with a premium bullion bar.

This defies expectations, proving just how powerful the eBay Bucks silver stacking strategy can be.

 

Scottsdale Mint Silver Bullion Bars & Rounds for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

Better yet, this approach to buying silver at spot is incredibly flexible.  I purchased 67 ounces, but that is because it is what I could afford.  If you wanted to, you could scale this strategy down to just a couple hundred dollars or scale it up to many thousands of dollars.  And you could also tilt it towards higher premium silver (at a slightly higher cost per ounce) or lower premium silver (at a lower cost per ounce) as you see fit.

And let’s not forget that the cherry on top for an eBay Bucks silver stacking strategy would be to combine it with a rewards credit card.  It is fairly easy to get a credit card that pays 1% to 2% cash back on purchases.  All of the numbers above assume you aren’t using a cash back card.  If you do use one, you might even be able to buy silver below spot!

If you are interested in protecting your wealth, I highly recommend that you use this powerful eBay Bucks silver stacking strategy to buy silver at spot.

A word of warning though.  I was only able to buy silver at spot because no one cares about precious metals at the moment.  In a future scenario where silver and gold demand shoots through the roof, there is no way deals this good are going to be available.  So buy now, while you can still get it cheap (Ed. Note: My warning at the time now sounds prophetic given the shortages that hit the silver market during 2020)!

 

Read more thought-provoking Antique Sage investing articles here.

-or-

Read in-depth Antique Sage investment guides here.


Getting Your “Fair Share” of the Hard Asset Pie

Getting Your "Fair Share" of the Hard Asset Pie

We all want our fair share in life.  Unfortunately, with the onset of the greatest financial disruption since the Great Depression I suspect that getting your fair share will become increasingly difficult in the years ahead.  But there is still a small window of opportunity remaining – a period of time when the increasingly debased dollars in your bank account haven’t quite caught up to the reality of the extreme scarcity of most tangible assets.

You see, the world is currently awash in financial assets.  There are more equities, bonds and real estate securities in existence today (as measured by dollar-denominated value) than at any other time in human history.  And the growth rate of these financial assets has been absolutely stunning over the past several decades – a classic exponential curve.

In contrast, hard assets in the real world – things like precious metals, antiques, gemstones and fine art – have only experienced linear growth.  This makes them quite rare when compared to financial assets.

How rare?

That’s something I wanted to find out.  So I asked myself a hypothetical question.  What if everybody tried to get their “fair share” of hard assets?  In other words, what if we split the world’s supply of tangible assets evenly among the total world population?  How much would there be per person?

But let’s assume for a moment that we only care about the richest 10% of the global population.  Why do I make this distinction?  Because poor people, regardless of whether they live in developed or emerging markets, have a very limited ability to invest in anything.  They will almost certainly not get their “fair share”.  As unjust as this sounds, it is the truth.  Only the world’s middle class and wealthy have the means to realistically protect themselves financially against the coordinated central bank debasement that we now face.

Taking the richest 10% of the world corrects for this situation.  So it is only this select group that I will divvy up the world’s tangible wealth among in the calculations below.  But don’t worry.  It is actually much easier to make it into the world’s richest 10% than you might think at first.

As of March 2020, the world’s population reached 7.8 billion.  According to investment bank Credit Suisse’s 2019 Global Wealth Report, it takes a net worth of just under $100,000 (including primary residence) to belong to the richest 10% of the global population.  The people who fit this description are the usual suspects – many North Americans, Western Europeans and Japanese, along with China’s rising middle class.

So how much is your fair share of the world’s hard assets?  Read on to find out!

It is estimated that the total stock of above ground gold is around 170,000 metric tons, or 5.5 billion troy ounces.  This king’s ransom represents about 90% of all the gold humanity has mined throughout history.  This is due to the fact that gold is almost always recycled and, therefore, never truly lost.

If we divide this massive gold stash evenly among the richest 10% of the global population (780 million people), we come up with a modest per person “fair share” of 7 troy ounces each.  At the current spot price of $1,800, this amount of gold would only cost you $12,600.

The numbers for silver are even more shocking.  Although estimates vary widely, if we (generously) assume that there are perhaps 1,360,000 metric tons of silver stockpiled in the world today, it would translate into just 56 troy ounces for each of the world’s wealthiest individuals.  Even with today’s usurious premiums on physical silver bullion ($22 an ounce, delivered), your fair share would cost a paltry $1,232.

And if you thought the numbers for silver were nuts, just wait until you hear how rare platinum is!  We can safely predict that there are no more than 12,000 metric tons of platinum in the form of bullion, jewelry and scientific equipment in the world.  If we split this (probably overestimated) amount evenly among the world’s richest 780 million people, we would come up with a scant 1/2 troy ounce per person.  Even when paying an elevated premium over spot to acquire physical metal, your fair share of platinum would only cost you $500 to $600 today.

But what happens when we move beyond precious metals?

Here’s a hint.  Antiques are just as rare as gold and silver, if not more so.

For example, numismatic experts believe that up to 65 million of the iconic U.S. Morgan silver dollar have survived in mint state condition.  Perhaps a slightly smaller number of U.S. silver Peace dollars are also extant in mint state.  These U.S. silver dollars were struck in massive quantities, making them relatively common today.  They are so common, in fact, that there is probably the same number of Morgan silver dollars as there is old foreign silver crowns (silver dollar-sized coins) in existence.  Some well-known examples of foreign silver crowns include the British crown (a pre-decimal 5 shilling piece – last struck in 1937), the French 5 franc (last issued in 1871), the Mexican 1 peso (last minted in 1914) and the Japanese 1 yen (also last struck in 1914).

So let’s assume that we divide the world’s estimated supply of mint state U.S. silver dollars and foreign silver crowns equally among the world’s wealthiest 10%.  That would be 65 million Morgan dollars plus maybe 40 million Peace dollars plus another 65 million foreign silver crowns for a grand total of 170 million coins.  These are probably excessively kind assumptions about the surviving populations of large silver coins, but we’ll use them anyway.

Once we divide our 170 million coins among 780 million people, we find out that your “fair share” is only about 1/5th of a coin.  Of course, we can’t split a coin into fractions and still have it retain any numismatic value.  So about 78% of the wealthiest 10% of the population will never, ever get their fair share here.  This is in addition to the poorest 90% of the population who will also get a big goose egg.  Only 1 in 5 middle class/wealthy individuals could possibly have the honor of owning one of these impressive pieces, representing about 2.2% of the total global population.

And the price tag?  A mere $50 or $60 will get your foot in the door with a PCGS or NGC certified mint state Morgan silver dollar.  For those interested in learning more about this subject, please read my beginner’s guide to investing in slabbed Morgan silver dollars.

It is insane to think that rare coins have been so devalued in the modern age that $50 is enough to buy an entry level investment grade example.  But it is completely true.  And coins aren’t the only category of tangible asset that has been neglected during the raging paper asset bubbles of the past decade.

Vintage watches are also incredibly undervalued.  These include pre-1990 watches from world-renowned brands such as Rolex, Omega, IWC, Hamilton and Longines, among others.

A quick search of eBay reveals that there are approximately 40,000 vintage watches for sale on the platform at any given time.  Now I’ve tried to filter out examples that I consider uninvestable.  This means I’ve excluded parts watches, quartz watches and gold-filled or gold-plated watches.  If we conservatively guesstimate that the remaining 40,000 specimens for sale on eBay represent just 0.1% – 1/10th of a percent – of the surviving vintage watch population, it means that there are around 40 million old collectible watches out there.

It seems like a lot of watches, right?

Wrong.

If everyone in the global middle class wanted to own just one of these horological treasures, we would quickly discover that only 1 in 20 people would have their wish fulfilled!  High quality vintage watches, like most hard assets, are obscenely rare.  Yet $500 to $1,000 will allow you to choose from a wide range of desirable examples.  $1,500 to $3,000 will get you a superlative solid karat gold dress watch or complication-laden sports watch from some of the finest manufacturers out there.

So what is going on in the world?  How can hard assets that are so scarce be so cheap right now?

I have a theory on this.

In my opinion, the financial authorities have spent the last 30 years striving to answer a question that nobody asked.  What if everything that humanity once held in high esteem – precious metals, gemstones, antiques, fine art – was suddenly ignored and treated as though it was worthless?  It is a bizarre sociological experiment doomed to end in tears.

So why would the central bankers even attempt it?  That, at least, is somewhat easier to answer.  If everyone is chasing paper assets instead of tangible assets, it gives the world’s monetary authorities unprecedented control over the global economy.  At least while it lasts.

But the outcome of this perverse experiment has been surprising.

The value of hard assets didn’t drop to zero as the central planners had hoped.  Instead, they stubbornly maintained a bid – albeit at reduced prices – in a financial world madly obsessed with worthless unicorn IPOs, securitized junk debt and exotic derivatives.

Now the pendulum is slowly but surely swinging the other way.  This threatens to destroy the fake economy that the world’s central bankers have so painstakingly tried to build.  Your only protection is to diversify your portfolio into hard assets – precious metals, antiques, rare coins and other tangibles.  It is imperative that you get your fair share of these undervalued assets while bargain pricing still abounds.

 

Read more thought-provoking Antique Sage investing articles here.

-or-

Read in-depth Antique Sage investment guides here.

2020 Antiques Market Update

2020 Antiques Market Update
Photo Credit: Tom Hilton

2020 has been an eventful year in the antiques market.  Hell, 2020 has been an eventful year in just every other market too.  As we all know, the coronavirus pandemic struck a major blow to the global economy.  Of course, the real problem wasn’t the artificially induced economic standstill – an unintended side effect from the lockdowns meant to control the spread of the virus.  Instead, it was the fact that this act radically destabilized the “Everything Bubble” that had pervaded the global securities markets for nearly a decade.

We currently are in the midst of the knock-on effects from this historic (and ongoing) economic debacle.

To say the 2020 antiques market has been tumultuous is an understatement.  We are seeing a plethora of cross-currents pulling the market in different directions simultaneously.  The situation is, to put it mildly, confusing.  But I’ll try to untangle some of the 2020 antiques market trends that I’ve been seeing.

First up, I want to talk about the bullion market.  This might seem a like an odd topic to bring up when talking about antiques, but precious metals are a major component in many fine vintage items (particularly those that are considered investment grade).  So it is quite pertinent, in my opinion.

Well, the precious metals market experienced a massive shortage starting in March of 2020.  Silver, gold and platinum coins and bars disappeared from both physical and online coin dealers, shooting premiums through the roof for any remaining inventory you could find.  Even as I write this in July 2020, the bullion market has not yet fully recovered from its annus horribilis.

This feeds into our first 2020 antiques market trend: rising prices for old gold and silver coins – but only in the low-end of the market.  This means that worn or common collector coins that sell primarily based on the value of their contained gold or silver have risen with the strong bullion market.  But, paradoxically, better date or higher grade coins that typically sell for high premiums over their melt value have tended to stagnate or even decline slightly in price.

So for example, I purchased a pair of common date Morgan silver dollars in decent circulated condition for $43 from eBay in February 2020.  Fast forward to today (July 2020) and the exact same eBay seller is listing very similar Morgan silver dollars for $57 a pair.  That is a price increase of over 32% in just a few months!  And people are willingly paying that new, higher price too.

But if you take a look at slabbed common date Morgans in MS-63, MS-64 and MS-65 conditions – classic collector coins – you will find that prices have barely budged from earlier this year.  In other words, it costs more to get into the low-end of the coin market while better condition coins languish due to the economic apocalypse.  It also means that a relatively small step up in price will often get you a dramatically better piece.

Antique sterling silverware has also been plagued by similar tendencies to the coin market.  Premiums on sets of sterling flatware have been trending downward for more than a decade now, but prices have ultimately been supported by the underlying scrap value of silver.  Only desirable makers and patterns garnered continued interest and strong bids during this period of decline.  But during the chaotic 2020 antiques market, premiums on sterling flatware and hollowware have more or less collapsed.

Whereas before sets of silver from renowned luxury makers such as Tiffany & Co. or Puiforcat were still able to reliably command high prices, now even these storied brands are feeling the undertow of our Greater Depression.  Lately I’ve seen many eBay listings for sterling pieces by respected makers like Gorham, Birks and yes, even Tiffany, go for not much more than melt value.  This is an undeniably monumental development.  It is clear evidence that the progressive and ongoing impoverishment of the middle class is effectively crashing the 2020 antiques market.

Vintage watches are the next category of antiques I wanted to talk about.  As you can probably guess, the trend here has been quite similar to what we’ve already seen with rare coins and sterling silverware.  The low-end of the vintage watch market is still fairly robust, with over 10,000 watches changing hands on eBay in the $150 to $500 price bracket over the past few months.  But volume drops off precipitously at higher prices, with less than 900 watches selling on eBay in the $2,000 to $10,000 price range over that same period of time.

Many fine antique wristwatches go begging for a bid in this environment.  It is all too common to see stately, older Hamiltons, Lord Elgins and Bulovas sell for little more than the value of their gold cases.  Even watches from hallowed European makers such as Omega, Longines and Universal Genève can struggle to surpass the $700 price point.  Only the very strongest brands – the Rolexes, Patek Philippes and Vacheron Constantins – still command top dollar in today’s vintage watch world.

Not every aspect of the 2020 antiques market is gloom and doom however.

There is anecdotal evidence that the antiques trade is finally completing the painful transition to online sales – a trend that many old-time dealers fiercely resisted for many years.  It appears that Covid-19 simply accelerated the movement to online-only sales that was already evident for more than a decade beforehand.  Of course, the downside to this sea change is that many small antique shops with physical storefronts will not reopen in the wake of the pandemic.

Online sales are ultimately a very good thing for the antiques industry.  They allow a larger pool of sellers to connect with a motivated throng of buyers.  And, honestly, the antiques market needs to make this transition or risk fading into permanent irrelevancy.  Despite the short-term teething pains this might cause some people involved in the antiques business, it is still for the best in the long-term.

But the aspect of the 2020 antiques market that I find most intriguing is the increasing trend for Millennials and Generation Xers to buy antiques and vintage collectibles as investment vehicles.  After all, if your savings account is going to yield zero interest pretty much forever, why not turn your wealth into physical objects?  You’ll have a much better chance of preserving your purchasing power with a carefully chosen portfolio of fine antiques than you will gambling in our insane casino stock market.

The only downside I see is that many people new to the field of antiques are buying vintage 1980s and 1990s collectibles, rather than older antiques with an established track record.  This is to be expected as middle aged people have a tendency to purchase items they fondly remember from their youth, thus driving up prices for those items.  But this trend has a dark side too.  1980s and 1990s collectibles will predictably rise in price until their demographic tailwind is exhausted.  At that point, everyone will try to sell, but to whom?

In the year 2040, no one will want your Alf memorabilia.

This is why I recommend that antique investors stick to classic, high-intrinsic value antiques such as rare coins, vintage wristwatches, antique jewelry and sterling silverware.  These are categories that have stood the test of time, reliably appreciating over decades, if not centuries.  And as an added bonus, these older, established antiques are currently selling for ridiculously low prices relative to stocks and bonds.

I say that if the 2020 antiques market insists on offering us such grand bargains, we would be foolish not to accept them.  Invest accordingly.

 

Read more thought-provoking Antique Sage trends articles here.

-or-

Read in-depth Antique Sage investment guides here.

Understanding Price Trends in the Collectibles Market

Understanding Price Trends in the Collectibles Market
Photo Credit: Michel Ngilen

Collectibles price trends are a hot topic in the vintage item marketplace.  And for good reason.  Everyone wants to know which collectibles will appreciate in value over the next few years and which ones should be unloaded now before the price collapses.

Although few know about it, collectibles price trends actually follow a predictable life cycle.

A large source of demand for vintage items comes from people who were exposed to them when they were children or teenagers.  This interaction could have taken place anywhere: at school, a friend’s house, their grandparent’s or in the child’s own home.  The only important factor is that a young person sees, touches and experiences these items during his formative years – roughly between the ages of 5 and 20.  As these children grow up and become adults, it is natural to want to recapture that spark of happiness by reacquiring the fondly-remembered collectibles of their youth.

In other words, nostalgia is a major driving force in the price trends of collectibles.

This won’t come as any surprise to people with intimate knowledge of the vintage and antique marketplace.  But it does allow us to formulate interesting projections of collectibles price trends based on demographics (and simple math).

So let’s start with one immutable fact: most collectors are between the ages of 30 and 65.  Now you might ask, “Collectors of what?”  The answer to this is: anything!

People tend to be most acquisitive during middle age.  This is when they have the most disposable income and strongest psychological motivation.  Before their 30s, most people are concerned with making friends, having fun and finding a significant other.  After the age of 65, many people are constrained by lower incomes in retirement, smaller living spaces, or the onset of ill health.

So before the age of 30, few people are hard-core collectors.  After the age of 65, even formerly hard-core collectors are gradually forced to either buy less or possibly disgorge their collections.    Therefore, collectors tend to be most active between their 30s and 60s, when lifestyle conditions are close to perfect.  And although there will always be exceptions to this rule, we only care that it is true in a broad, statistical sense (i.e. this is the way it works in large populations).

With this information we can forecast demand trends for collectibles based on their era.

As I write this, the year is 2020.  So 65 year olds (the trailing edge of the collector demographic) were born in 1955.  But they may remember items they came into contact with at an early age, perhaps as young as 5.  So collectibles from the year 1960 (and later) will be in general demand.  Likewise, 30 year olds, born in the year 1990, represent the leading edge of the collector demographic.  These people might be interested in items from the mid to late 1990s.

The time period between the leading and trailing edge of the collecting demographic represents the sweet spot for vintage items.  So right now, in the year 2020, items from circa 1960 to 1995 are in the highest demand.  Prices for collectibles at the leading edge of the wave will tend to ramp quickly as new collectors age into their 30s and begin to show an interest in them.  By the same token, as 65 year olds begin to age out of the collecting demographic, price trends for those collectibles at the trailing edge of the wave will rapidly turn negative.

We can see this collectibles market trend in action right now.

Early 8-bit and 16-bit video games from famous consoles such as the Nintendo NES, Super Nintendo and Sega Genesis have skyrocketed in value over the past decade.  These games were originally released in the late 1980s to mid 1990s, but became obsolete long ago due to technological advancements in computer graphics and sound.

However, that hasn’t stopped legions of 30 and 40-somethings from rediscovering their childhood treasures as adults.  It was once possible to buy old game cartridges from hallowed gaming series like Castlevania, Duck Tales or Mortal Combat for a dollar or two at garage sales or flea markets.  But over the past 10 to 12 years prices have increased tremendously.

For example, a used copy of the 1994 Sega Genesis game Castlevania Bloodlines now sells for around $50, versus just $10 dollars back in 2007.  If you happen to have a gently used copy with its papers and original box intact, the price shoots up to nearly $150.

 

Price Trend for Sega Genesis game Castlevania Bloodlines

Price trend for the Sega Genesis game Castlevania Bloodlines

Photo Credit: Price Charting

 

There are other collectibles from the late 1980s/early 1990s that are increasing in value as well.  Certain comic books, movie posters and toys from this era have enjoyed strongly rising price trends as the demographic winds have been at their back.

But although the sun may be rising for 1990s collectibles, time is the enemy for collectibles on the other side of the trend.  In particular, pop culture kitsch from the 1950s and early 1960s is starting to feel the chill from an increasingly elderly collecting demographic.

Two great examples of these price trends are Elvis and Hopalong Cassidy memorabilia.  Elvis is the iconic 1950s/1960s singer who popularized rock and roll.  He was (and still is for the most part) a household name, who inspired legions of devoted fans.  But those Elvis fans who were teenagers in the 1950s are in their 70s today.  As a result, the market for Elvis collectibles, after having held strong for many decades, is collapsing.

The same story holds true for Hopalong Cassidy, a children’s television hero from the 1950s.  Although millions of fans enjoyed his TV adventures during their childhood, the demand for Hopalong Cassidy collectibles is nearly gone today.

In both cases, prices for paraphernalia associated with these two 1950s personalities have crashed.  And honestly, it won’t be too long before the same thing happens to pop culture collectibles from the 1960s.  This doesn’t bode well for Rolling Stones or Beatles collectors.

But our thesis also applies to broad collectibles price trends beyond just famous personalities.  Right now Mid-Century – especially Mid-Century furniture – is in style.  So prices for these pieces are relatively high.  But Mid-Century collectibles are also at the trailing edge of the demographic wave.

Therefore we can surmise that vintage Mid-Century furniture will get hit two-fold in the years ahead.  First, its natural buying demographic will start to age-out.  This is inevitable, unavoidable and quite devastating by itself.  But a secondary negative factor for Mid-Century furniture is that its characteristic streamlined look will eventually fall out of favor as decorating tastes naturally change.

So don’t buy Mid-Century furniture today if future returns are important to you.

And don’t make the mistake of believing that collectible price trends are permanent for items that are currently gaining popularity.  Although some 1990s video games and comic books have done tremendously well over the past several years, their time in the sun isn’t forever.  One day they too will follow in the footsteps of Elvis memorabilia, ending up in trash cans and land-fills.

 

Vintage Super Nintendo Game Cartridges for Sale on eBay

(This is an affiliate link for which I may be compensated)

 

This is one of the reasons why I invest exclusively in “classic” antiques.  By this I mean items that are made from precious metals, gemstones, exotic woods or other high quality materials.  I also prefer to buy items that were made before 1950 (although this isn’t an absolute necessity).  Price trends for items made before 1950 have already rolled off the demographically-driven wave, meaning that fad-related demand is usually non-existent.  It is also helpful if an item has a well-established collector’s market with a century or more of stable demand.

So the antiques I tend to buy occupy a pretty short list.  I like old coins, vintage wristwatches, antique jewelry and other similarly compact, high-value items.

As always, my humble advice to others is to always buy what you like.  After all, you’re the one collecting it.  Just realize that many collectibles will end up being worth very little after they hit about 60 years in age.  Only the really worthwhile stuff retains value after that.

 

Read more thought-provoking Antique Sage editorial articles here.

-or-

Read in-depth Antique Sage investment guides here.