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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Client Relations Manager
Jennifer A. McCabe
Client Relations Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
September/October 2023
Investing in Collectibles
From artwork and sculptures to rare wines and old baseball cards, collectibles often comprise a piece of intergenerational wealth and they can serve as an alternative investment that diversifies your portfolio. But be careful. If you intend to pass these and other collectibles of value on to family or sell them and invest elsewhere, you need to appraise and then protect their value.
Diversify with Collectibles
Collectibles are often part of a diversified high net worth portfolio, and they are as numerous as they are diverse. Everything from comic books and sneakers to jewelry and dolls can make up a collectibles portfolio. But is investing in collectibles, which can lose value and whose values can be volatile, right for you? Answers to these questions may begin to help you decide.What percentage of your portfolio will be comprised of collectibles?
The same guideline that holds true about almost any investment is true with collectibles: you should almost never put all your investments in one asset class. Collectibles, because they are known to be volatile investments, should make up only a small portion of most portfolios. Your financial professional can help you decide when you determine your asset allocation.But can’t some collectibles grow dramatically in value?
Sure they can. You can see how much some of the rarest and most valuable collectibles have fared in recent years on the chart below. A few things must hold true for these investments to appreciate in value. First, they almost always must be in pristine condition. You’ve heard of collectors who won’t wear a pair of sneakers – yes, some of them are collectibles – or take an action hero figure out of a box. That’s to protect their condition and value.What do I Need to Know?
The best way to get started is to pick a collectible that you are passionate about like classic cars or wines. Collectibles aren’t as easily traded as some other investments. You’ll need to find a reputable appraiser and specialty insurance to protect yourself financially from theft or damage. Collectibles generally won’t generate cash until sold, and they generally cost money to maintain and store. And, most importantly, you have no guarantees. You’ll also need some time for any potential appreciation. Not all investments will maintain their gains. Collectibles, including some figurines and dolls, have lost value along with losing favor over time.As with any investment, make sure collectibles meet your risk criteria and that they occupy an appropriate percentage of your portfolio. Consult your financial and tax professionals.
These Collectibles Sold for Some of the Highest Prices Ever
- An 11.15-carat Williamson Pink Star diamond - $57.7 million
- First Marvel comic book - $2.4+ million
- The 1856 British Guiana One-Cent Magenta Stamp - $9.5 million
- A 1952 Mickey Mantle baseball card - $12.6 million
www.artnews.com/art-news/news/leonardo-da-vincis-salvator-mundi-sells-450-3-m-christies-new-york-9334/
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Centuria Financial Group is not affiliated with Prudential Financial. Centuria Financial Group sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Centuria Financial Group is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Centuria Financial Group and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Sara E. Martin and Jennifer McCabe are employed by David McCabe and not The Prudential Insurance Company of America or its subsidiaries.
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