Now that the holiday season is upon us and people are looking for gifts to buy for friends and family, I thought I would again write about the worth (or lack thereof) of many collectibles and what makes a collectible actually worth something. As much as I enjoy programs like the Antiques Roadshow and reading about toys that have become collectors’ items, not every toy or figurine will appreciate in value. That message seems to get lost in the glow of someone learning that their dumpster dived item is worth six figures.
Figurines
If you are of a certain age, you will remember seeing Hummel, Precious Moments and other porcelain figurines for sale in gift shops and department stores. Hummels are figurines based on the drawing of German nun, Maria Innocentia Hummel and Precious Moments started as greeting cards drawn by American artist, Sam Butcher and later the line expanded to porcelain figurines. Lots of people bought both Hummels and Precious Moments in their heyday of the 1960’s and 1970’s with the hopes they would appreciate in value. Well, a funny thing happened on the way to Easy Street. Once the original owners of these items died, tastes changed, their children were stuck with these things that no one else wanted. Taking Hummels as an example, Louis Kahn of Bakerstowne Collectibles, an appraisal and consignment service located in West Hempstead, N.Y, states that most of them sell for $50 or less. At those prices, you can’t exactly trade in a Hummel for a mansion and a yacht.
Collector Plates and Thomas Kinkade Paintings
Yes, those items advertised in the Sunday magazines of countless newspapers across the country where for just three payment of $29.99 you can own a collectors’ plate featuring a scene from a Norman Rockwell illustration or an illuminated Thomas Kinkade painting. Again, the trouble with these items is that so many of them were made that the supply is greater than the demand. So, if you come across a collection of collector plates or Thomas Kinkade paintings and decide not buy them, don’t feel bad. You came out ahead of those who bought these things with the expectation of a return on investment.
The Other Side
“Wait a minute.” You must be saying now. “There have to be some collectibles that have appreciated in value or else there wouldn’t be things like Hummels and collectors plates.” Yes, there are collectibles that have appreciated in value, the one thing that they have in common is rarity. For example, when Kenner’s Star Wars action figures first came to market, the Luke Skywalker, Obi-Won and Darth Vader figures had a telescoping light sabers built in. Well the mechanism didn’t work all the time, so Kenner redid the line and took out the mechanism. Since so few of them hit the market, the action figures with the telescoping light saber are now worth between $6,000 and $7,000. (Why do I have a feeling that there will be a run on Star Wars action figures with the telescoping light saber feature?) Of course, the notion of rarity leading to increased value makes sense. If diamonds were available as a prize in cereal boxes, would they be worth so much? The same goes for collectibles. As pretty and well made as some of the collectibles mentioned are, that doesn’t mean that they will be worth lots of money 20 or 30 years later.
So, let this be a warning to be careful which doo-dads to buy. Better yet, don’t buy them in the first place. Just stick your money in the bank. Money in the bank will grow via compound interest*. The only thing many collectibles will accrue is dust.
*Compound interest is where interest in earned on the initial amount invested, also known as the principal, and on the interest, as well. For example, if you invest $100 for 3 years at 5 percent compound interest, at the end of 3 years you would have:
$100 (1 + 0.05)3 = $115.76
So, your investment would have earned $15.76 in interest in 3 years time.
http://www.preciousmoments.com/content.cfm/precious_moments_history_timeline
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