Collectibles for the gullible
There's nothing wrong with collecting. If you want to collect something because you like it — and you can afford it — go for it.
But there are few things you should collect as a way of saving for retirement. While a vintage doll might still fetch a huge return, talk to the folks who rushed to buy a Cabbage Patch Kid about how well their investment is doing today.
Indeed, tastes are fickle, and whatever is a hot item now could fizzle out and sell for pennies on the dollar later on eBay, particularly if that item was mass-produced.
Don't believe us?
Here’s our list of seven collectibles whose once sky-high prices have plummeted.
Treat this list as a warning: To secure your golden years, put your money in an IRA or other form of retirement savings and avoid speculative investing in collectibles.
Beanie Babies, the tiny stuffed animals with cute names like Legs the Frog and Chocolate the Moose, launched in 1993. Two years later, the plush animals that originally sold for $5 to $7 were considered as much a commodity as a toy.
Manufacturer Ty Inc. fed the fervor by "retiring" some of its dolls, which drove demand and fueled price increases on the collectibles market.
"The world has gone Beanie mad," one collector lamented in 1998 to The New York Times.
Some people boasted collections worth hundreds of thousands of dollars. No wonder, as a single rare Beanie could fetch four figures on the resale market.
For example, the royal blue version of Peanut the Elephant — the "Holy Grail of Beanies," according to the Times — sold for as much as $5,200 in the late 1990s.
But the craze quickly waned. And then, predictably, prices cratered.
By some estimates, the rare Beanies have lost as much as 96% of their peak value. Today you can find many of these toys on eBay selling for as little as 99 cents.
Generations of kids have collected baseball cards, but in the 1980s and '90s, the hobby of amassing gum-stained pieces of cardboard really took off as speculation exploded.
So, too, did production. Manufacturers produced 81 billion cards a year during the hobby's heyday, according to the book Mint Condition: How Baseball Cards Became an American Obsession.
But the baseball card market crashed in 1994, according to BaseballNation.com, after a players' strike led to the cancellation of the World Series. The hobby hasn't recovered.
Earlier this year, Mike Berkus, executive director of the National Sports Collectors Convention, told The New York Times he estimated the amount of money from card sales has dropped about two-thirds from its peak.
There's just no demand.
This doesn't mean it's not worth your time to go through your old cards and see if you have a gem, but don't bank on it happening as a way to shore up retirement accounts.
Don't get us wrong; there are some comic books that have value. But anything published after 1970? Vincent Zurzolo, owner of Metropolis Collectibles in New York City, says forget about it.
They're just not a good investment.
"Back in the early '90s, the black-bagged Death of Superman No. 75 was selling for upwards of $250, and now it sells for a measly $10 a copy," he says.
And that's just one example of once pricey comics whose values he's seen plummet.
Zurzolo says if you are going to get into the comics game, stick to collections published prior to the Nixon administration.
Still, we'd rather see you put your money in a safer investment that's not reliant on the condition of a few pieces of paper.
In the 2005 film The 40-Year-Old Virgin, Andy (played by Steve Carrell), sells his impressive action figure collection on eBay to fund opening his own home electronics store. That's a nice thought, but it's not usually reality.
While some of these toys can sell for big bucks, especially if they remain in their original packaging, it's hard to pick what will be valuable 20 to 30 years from now.
Most of the biggest action figure sellers, like a Babe Ruth figure with a blue hat or a telescoping Darth Vader, sell for thousands of dollars ($15,000 for Ruth, $7,000 for Darth) because they were mistakes. But for every oops that turns into gold, there's hundreds of bit characters whose action figure value barely budges.
If you like a specific sci-fi franchise, by all means buy action figures as your budget allows. Just don't bank on those same toys providing the start-up funds for your own company one day.
And maybe take them out of the box and let your kids play with them, as they were intended to be used.
A bobblehead doll is exactly what it sounds like: It’s a doll where the head bobbles when you shake the table or tap on it. The dolls as we know them were first made in the 1950s. Major League Baseball first made a paper-mache bobblehead doll for each of its teams in the 1960s.
Today, they're popular giveaways not just for MLB teams, but for other professional sports as well. They're fun, but they're not collectibles into which you should sink big money — they rarely become more valuable than the price of your admission ticket.
Sure, some of those 1960s dolls sell for more than $100 on eBay, but if you're spending $50 or $75 today for a ticket to a game with a bobblehead giveaway, you might not even make back your money.
Coin collecting is a hobby as old as, well, coins. And older coins can be valuable for a two reasons: because they are rare or because they are made of rare metals, says Andrew Mellen, a New York-based professional organizer who specializes in identifying items in your home that could be resold.
Yes, you can get really lucky if you make sure to look at the coins that come your way.
But that doesn't mean you're always going to strike it rich, whether you're buying packets of coins from the Franklin Mint, commemorative coins (which don't appreciate in value and typically only resell for the medal's meltdown value) or hoping that old coins you hold on to will appreciate in value.
That's because, Mellen says, coin and metal markets are volatile. Just look at what's happened to gold prices, which have fallen about a third from 2011 highs.
"I wouldn’t necessarily encourage people to look to coin collecting as a way of investing or trying to secure some sort of financial future," he says.
It used to be that every average American household had at least one Hummel figurine on a shelf somewhere. But as Kovels, the antique and collectibles powerhouse guide, says, "The generation that appreciated these little porcelain statues is now downsizing or dying off, dumping Hummels back into the market by the thousands."
So, where once their resale value was in the hundreds, you can now scoop most antique Hummels off eBay for anywhere from $20 to $80 (the exceptions are Hummels taller than 12 inches or made before 1949, according to Kovels).
The declining value of Hummels points to a problem with collecting now in the hopes of a big payout in the future: You have no idea what will be popular 30, 40, 50 years from now.
"I remind folks that it takes two people to guarantee value — the seller and the buyer," professional organizer Andrew Mellen says.
Without a buyer? Collectibles as retirement plan just falls apart.