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Blue Chip Stocks Or Blue Chip Collectibles?

November 11, 2008

By Ray Schulte

Ray Schulte recommends blue chip collectibles over blue-chip stocks.
After October 1987's "Black Monday" and the 1992 inflationary times, I thought our economists and government had figured out how to create fail-safe measures to prevent the financial difficulties the country is experiencing today. I had great faith in our capital markets and financial institutions, but who is ultimately responsible for our current economic situation?

It became a little clearer while watching "60 Minutes" recently. CBS's Steve Kroft reported that the global credit crisis began with the collapse of the American housing market and has been magnified by the implementation of credit derivatives or credit default swaps. Simply put, companies were placing side bets or wagering on financial outcomes without ever having to actually buy the stocks, bonds and/or mortgages.

It was illegal until Congress gave Wall Street an exemption in 2000. Major financial institutions sold the unregulated credit default swaps and the government didn't obligate them to have money set aside to cover potential losses. When the market started showing signs of trouble, those who purchased the credit default swaps wanted to be paid. Unfortunately, three of our country's major financial institutions, Bear Stearns, Lehman Brothers and AIG couldn't pay off the bets made via the credit default swaps.

Congress assumed that Wall Street would regulate themselves and be financially responsible, but obviously that hasn't happened.

I've always invested in stocks, and while I still do today, I feel comfortable with my overall portfolio because years ago I started collecting original vintage movie posters and various signed and unsigned collectibles which have retained and appreciated in value through all the economic peaks and valleys. I continually talk with many memorabilia collectors throughout the country and while they are concerned with the current state of the economy, they're not panicking. Mainly because they feel their vintage collectibles have retained their value and should continue to appreciate even in our recessionary times. 

While stocks are risky, here are the top 10 reasons why investing in vintage sports collectibles is worth investigating: 

1. Vintage collectibles can reflect on or create memories we cherish for a lifetime.

2. Collecting can introduce you to new friends who share the same passion you do- movies, art, game used equipment, trading cards, comics, etc.

3. Collecting can involve establishing goals, challenges and game plans which adds diversity to your life.

4. Collecting can be started with minimal expense until you get acclimated with what interests you.

5. The sports collectible industry is approximately a $2 billion business with easy access to the collecting community.

6. Collectors can start their collection and investment at any dollar level.

7. Vintage memorabilia items retain their value and many items continue to appreciate - even in and through poor economic times.

8. You own and have collectibles in hand, which makes it a tangible asset and easier to liquidate.

9. Easy access to historical background information via the internet, memorabilia conventions and local dealer networks.

10. Vintage collectible market value will not shift radically.

Individuals who collect current and/or former athletes signed or un-signed collectibles should also feel good about their investments. Historically, current and former athletes' signature products very seldom fluctuate compared to the stock market and real estate investments of today. Sports auction houses throughout the country have experienced significant growth within the past few years.

When you're ready to get involved in the vintage collectible market, make sure you research the area of interest you may want to pursue. Ask questions. Seek out experienced collectors who can offer you direction and good advice on how to get started. 

During these economically troubled times you might sleep a little better at night knowing you have invested in vintage sports collectibles. In addition, why not enjoy new friends who share the same passion you do and the vintage sports collectibles that create memories for a lifetime.

In the meantime, all the best and good luck with your collecting and finances. I recommend blue chip collectibles over blue-chip stocks.

Ray Schulte is the president of Schulte Sports Marketing. Anyone having questions concerning their collections can e-mail ray at RaySchulte@comcast.net.

Issue 131: November 2008