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Collectibles
Are Set to Roar in 2020
The past few years
have not been kind to collectibles markets. It’s safe to say it's a cheap and
hated space right now.
But there are a number
of reasons many people believe that is about to change...
Personally, I don’t
think Unconventional Wealth’s Collectibles Week could
have come at a better time.
Why? Glad you asked…
Why Own Collectibles at All?
Collectors and
investors alike have been buying collectibles — things like rare U.S. and world
coins, rare stamps, watches, art, wine and automobiles — for as long as they
have existed.
Some do it as a symbol
of status. Others do so simply because they admire the quality or beauty.
Others are laser focused on making money.
Whatever the overall
reason to buy or invest in collectibles, folks who buy them get the following
benefits…
- A completely uncorrelated asset
class
- Portfolio diversification
- Proven long-term returns
- Portability
- Generational wealth transfer
- Varying degrees of liquidity
- Rarity
- Pleasure of ownership.
All these benefits are
“baked in,” if you will, into this asset class. But like any asset class, their
prices ebb and flow based on the broader markets and the factors affecting all
markets.
Flow Follows Ebb
Suffice it to say, the
past five–10 years have not been the most agreeable for collectors in general.
We’ll take a look at
why some of the factors providing headwinds to collectibles prices are about to
change. But the first point I’d like to make is — as I write, collectibles are
cheap and hated.
Premiums for certain
types of early U.S. gold are down to decade lows. Some of that is due to large
estate liquidations, and some is due to net dishoarding of U.S. gold from
European banks.
We’ve seen even deeper
drops in premiums for British stamps over the same period.
Pick a collectible and
you are bound to find the same pattern.
Money has been going
elsewhere for 10 years as greed has prevailed over fear as a market driver.
Remember, we saw 4–50% corrections in stocks in the Great Financial Crisis of
2008–09.
Not surprisingly,
investors have been doubling down and letting winners ride as they furiously
work to replace the wealth lost a decade ago.
Many who were hoping
to retire 10 years ago still haven’t to this day.
All Good Things Must Come to an End
None of us will know
the current bull market top for stocks until we are correcting. Some may not
even recognize it then...
But I agree with Mike
Hall, CEO of JustCollecting, when he cites the long bull market in stocks as an
opportunity for collectors. Mike suggests, “Diversify now before the next bear
market. Remember what happened in 2008. Don’t get caught twice!”
There is wisdom in
Mike’s warning.
This historically long
bull market will come to an end — and paper gains will
disappear if you don’t take profit.
Now is the time to
find “cash” in your portfolio for collectibles through either trailing stops or
simply rebalancing. You have cash for collectibles. It is just currently
misallocated.
Mike further revealed
that the wealthiest investors are doing this now.
Worldwide auctions are
showing record realizations for the rarest items... Demand is rising from those
who are typically the first to act... This looks very much like an early signal
of the inevitable start of an uptrend.
Currency Diversification
Our good friend Geoff
Anandappa of Rare Tangible Assets (U.K.) sees opportunity to make money two
ways right now from collectibles.
You see, collectibles
have always benefited in the long term from being measured in mismanaged fiat
currencies.
Just like gold and
real estate, commodities such as rare tangible assets tend to store purchasing
power as the currencies we price them with become diluted and “worthless.”
And I agree with
Geoff’s assessment of the current situation… especially for U.S. dollar-based
investors.
The U.S. dollar is
currently in its eighth year of a bull market against other major currencies.
Historically, U.S. dollar bull markets tend to last seven–nine years.
When will this one
end? I don’t know.
But — like the
long-in-the-tooth equities bull market — a reasonable and prudent investor
would think the end is near.
Taking some dollars
off the table and putting them into rare tangible assets protects those assets
from the weakening dollar. And if you buy those tangible assets based in
another currency — like Geoff’s British pounds — your benefit can be twofold.
The Time to Act Is Now…
The rare combination
of factors in favor of higher collectible prices is too clear to ignore.
Cheap and hated
collectibles are giving would-be collectors some of the cheapest premiums in a
decade or more. The green shoots of a bull market in collectibles are starting
to show.
Equities are still
making new highs. But at this point, a correction is much more probable than a
sustained bull. And the U.S. dollars most of us would use to buy our
collectibles are at their strongest point for the foreseeable future.
Whether your goal is
profit or enjoyment, the time is now to give serious consideration to
collectibles. You and your heirs will be glad you did.
That’s one great way
for you to “Keep What’s Yours” in 2020.
P.S. Want to get your own investment-grade
collection going? Our partners at Asset Strategies International (ASI) have
perhaps the greatest collection of American coins you can find anywhere
— at least amongst those ready to sell.
And our partners at
JustCollecting can help you with world coins — and all sorts of other
collectibles, like stamps, cars, movie posters, you name it.
P.S. We frequently
cash in on collectibles by selling them at a local auction-it is rare that we
don’t double our investment!
Yours in freedom,
Bruce ‘the Poor Man’
Postscript & Other Relevant Posts
Tucker warns America about
the ‘New Way Act’-A scourge on Americans…aka: ‘the no deportation act’
The goal is to turn
illegals, gang members, etc. into a ‘protected class,’ giving them more rights
than citizens! Tell you House rep to vote NO on this reprehensible bill.
Rep. Garcia, Jesus G. "Chuy" [D-IL-4] (Introduced
12/10/2019) Cosponsored by socialists AOC, Omar, etc.
H. R. 5383
To reform the process for enforcing the immigration laws of the United States, and for other purposes.
--How do you starve a socialist? You hide their food
stamps under their work boots.
It’s a sad
fact, but guns can and do rust. In fact,
rust is the enemy of virtually all metal objects, and there are few things that
can degrade the appearance (and value) of metal as much as rust.
What’s more, is that literally any type of gun is vulnerable to
rusting. It is true that some finishes are significantly more rust-resistant
than others (stainless steel will resist rust much longer than bluing will, for
instance), but in the end, all guns can rust if they are not taken care of.
Even guns with an extremely tough finish, such as the Tenifer finish
on the Glock and Walther pistols, can rust eventually if they are exposed to
the elements for too long...
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1 comment:
Enjoyed this...we just bartered some collectibles for a professional service & saved out-of-pocket cash!
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