Hey comic collectors, how much should you invest in your comic book collection? You can use the same investment ratios as ultra-high net worth investors when it comes to managing your investment in collectibles!
A recent report published by Deloitte showed that ultra-high net worth investors choose to store a portion of their wealth in collectibles. In fact, on average, they choose to invest 5% of their portfolio in collectibles. In addition, a portion of UHNWI chooses to invest 10% or more in collectibles. This means that a typical ultra-high net worth investor chooses to place $2,500,000 of their $50,000,000 in collectibles, while some choose to invest more than $5,000,000 in collectibles! So, what does this mean for the average comic book investor looking to begin an investment in collectibles? You likely won’t be throwing around that kind of cash for comics. Still, you can utilize the ratio provided by this co-sponsored research paper by Deloitte and Credit Suisse in your own comic book investing ventures.
How much should I be Spending on Comic Books?
If you ask your significant other, they may say a lot less than you already are. You certainly don’t want to overextend yourself or put your families’ financial well-being in jeopardy because of your comic book purchases. You also don’t want to miss out on opportunities to own key books that could appreciate in value, oftentimes outpacing the performance of the S&P500. So, exactly how much should you put towards this type of investment?
If we know two things that ultra-high net worth investors are good at, it’s preserving their wealth and having fun with their money. Typically you think of this investor class making a purchase at an art auction or perusing their wine cellar. The truth is, high net worth investors likely invest in collectibles that they love and enjoy, just like you. A Jackson Pollock painting to one person is just as impressive as a Jack Kirby cover to another. The collectible is less relevant than the percentage of your investment portfolio you are allocating to it. Of course, that’s as long as it is outpacing inflation as an investment. If we use the ratio provided by the research study, you should be safe to put anywhere from 5 to even 10 percent of your portfolio towards collectibles.
What does Your Portfolio Consist of?
You should consider all of your investments as part of your investment portfolio, just like the UHNW investors interviewed for the study included; real estate (not your main residence), precious metals, stocks, bonds, cash, and, of course, collectibles. When you add up all of your investments, you should be able to divide the amount you have invested in comic books by that total number. This gives you your percentage allocated to comics. The caveat is if you own more collectibles than just comic books. Then, you would want to include all collectibles in that number. Are you just starting your collection? Do you want to know how much you could allocate toward your collection in the future? You can simply multiply 5% by your current investment portfolio total.
This is a starting point for any comic book investor. However, it’s not investment advice that can be applied to anyone and everyone. Everyone has a different financial situation. Be sure to consult your accountant or advisor before allocating a large percentage of your investment portfolio towards comic books or any other collectibles.