How Much Should New Collectors be Investing in Comics?

by Jestin Davis

060421E-1-300x157 How Much Should New Collectors be Investing in Comics?If you have chosen to invest your hard-earned money into comic books, naturally you want to know how much you should be allocating toward this new investment. Let’s talk about investing in comics!

In a past article I wrote, I discussed how ultra-high net worth investors allocate their investments on average, helping to understand how much they invested in the collectibles market as a whole. This is helpful to understand because these are successful investors interested in growing and protecting their wealth. The same principles can be applied to new comic book investors as well! Have you started investing in comics yet?

So, How Much?

When you look at asset allocation of ultra-high net worth investors, they tended to allocate 5-20% of their investable assets in investment-grade collectibles. This doesn’t mean average grades, this would be the best of the best. It also means that they would remove their primary residence and other holdings that are not specifically investments when calculating their investable assets.

For example, if you have $100,000 in investment accounts, cash, investment real estate, etc. thenxmen-adams1-204x300 How Much Should New Collectors be Investing in Comics? allocating $5,000 to investment grade comic books might be a good fit for you. $1,000,000 investor might allocate $50,000 to one high-grade key comic book and be fine in terms of their asset allocation. Again, I would not include mid-grade books or non-grade books when talking about investment-grade comic books. These would be the top 15% graded examples of the given book.

As a new collector, you might consider setting yourself a monthly budget to set aside for a key book that you can reasonably purchase within 6-18 months. Another strategy might be to allocate those monthly funds to purchasing affordable speculation books. These, you can turn a short-term profit on and put those profits towards purchasing a key investment-grade book. This, you can invest in for the longer term (5-10+ years).

What about Monthly Books?

I would not consider any books that you purchase on a monthly basis to read and enjoy part of your investment allocation. If you are purchasing the books to read, you should not consider them an investment. However, if they happen to appreciate in value you can flip them down the road for a profit. Your entertainment budget should be separate from your investment budget. As with anything, the more granular you can get with your budget the better results you should be able to achieve in the long term.

IMG5507-300x169 How Much Should New Collectors be Investing in Comics?If you are able to at least put a number on how much you are willing to spend on a comic book as an investment, you can do your research and determine a key book that fits your budget and has long-term collectability/investment value. People often use the term “collect what you love”. This is true to an extent for your investment books as well. There are no guarantees in the collectibles market that they will appreciate in value.

Set your sights on a key book that you will enjoy owning whether it goes up 50% in value or drops 50% in value. It’s impossible to predict the future. Still, key books with long track records of holding their value do have a better chance of continuing that trend. Lastly, I would say that investment-grade collectibles tend to increase in value during turbulent economic times. So don’t be afraid to use a spike in value to sell an investment book.  Wait until prices level off. Then, use those gains to purchase a more valuable book or higher grade of the same book at a discount. Most importantly, have fun while you’re doing it!

Tell us about your experience investing in comics in the comments!

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8 comments

Quinton OBrien June 7, 2021 - 12:27 am

There is irony in that I had this near exact conversation, nvesting in comic books as an alternative investment and setting a budget, about 2 months ago. Then we had a follow-up last night regarding how to track both graded comics as well as ungraded ones.

Few things Id add woukd be the following:
1. Older keys are less volatile than current keys or “hot” books. And its important in the early going to balance your risk between the two groups.

Good example currently: Venom 3 / Thor God of Thunder 2 vs Amazing Spiderman 361 / Thor 337. In the former you have some key modern first appearances of Knull and Gorr. The former because of a very hot modern run and the later because he’s going to be in the new Thor movie. The later 2 comics represent the first appearances of Carnage and Beta Ray Bill. Carnage is a well known and established Spiderman villian, and Beta is long term wielder of Stormbringer and rumored to be making an appearance soon as well. Comparing the two you can get investment grade copies (9.8 / 9.6 in the former and 9.4ish grade in the later) of each group for about the same price, however what is the “better” buy? If youre playing the short and get in early as news breaks then newer (2010ish plus) can be the way to go, but if youre willing to play the long game Id go with rhe later 2.

2. Buying graded initially is a great way to get started, but the upside drastically increases as you become able to recognize the approximate grade of “raw” comics yourself. While your money is tied up with the pressing/grading process being lengthy and you’re not “guaranteed” a grade, you can find good deals and flip healthy profits that are less volatile than speculation modern books if you’re looking for a bit more of a “challenge.”

3. Become an expert at a few books. Think of this as picking a sector or sectors in the stock market to specialize in vs trying to learn everything. Of course there are “keys” that are no 1st appearances, think of those more as dividend comics. They probably wont meteorically rise but theyll continuously accrue value. Then there’s other “investment” caliber books whose value to the greater comic world outstripes thier current value and they simply need a catalyst.

These are just a few of my toss ins briefly described in case they help anyone.

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Jestin Davis June 11, 2021 - 9:07 pm

Great points, I especially like #3.

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Phil June 7, 2021 - 7:40 pm

A little bit of caution may be in order here. Ultra High Net Worth people by definition likely have enough money for 100% financial freedom and security. This means that they never have to work a day more in their life and worry about having enough money to live to the ripe old age of 100 or more. They have $5 to 10 to $100MM++++ plus. If these people invest 5% of their money in collectibles, they can likely afford for these to be high risk investments. If they go belly up, they have nothing to worry about. While some comics may turn out to be great investments, I think it may be dangerous for the average American to carve out some target % of assets towards less liquid and riskier collectibles. Somebody with $10,000 of savings should unlikely officially put 5-20% of their investments into collectibles. Just my opinion!

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Jestin Davis June 11, 2021 - 9:05 pm

I agree with you Phil, and I wouldn’t count savings towards investable assets either, 6-12 months of expenses in savings is a good rule of thumb. Thanks for your comment.

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Patrick June 8, 2021 - 11:37 am

Excellent post – I am a bit of a new comic curmudgeon; I am a 50 year collector and I totally stopped buying new books when New 52 basically invalidated $800 of Black Lantern story line and tie ins I was buying. I do occasionally buy new, but other than WD 1 (which I’m glad I sold season 3) and the Miles Morales book – I can pick up almost any new comic at a dollar sale in South Jersey when I need.

Good advice – think logically folks – would you rather have low number FF or Spidey or buy $100 of new stuff a month…I understand it’s ones decision totally – and once Mandalorian craze dies down – well, I won’t pontificate any more.

And the classic old art and ads are so fun – your best advice? Have fun! Thx

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Jestin Davis June 11, 2021 - 9:12 pm

Thanks Patrick glad to hear you’re still having fun with it!

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Andy Baer June 8, 2021 - 12:50 pm

Jestin,… So, no current issues…. what do you think about investing in Currents when they are low ratio variant covers or autographed issues like what Dynamic pushes? Any idea of high returns on such over the years? No doubt certain artists pull awesome returns….

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Jestin Davis June 11, 2021 - 9:11 pm

I don’t know that there’s enough data out there to say what performance has been/could be in the future. Even Bronze Age keys don’t really have a long enough history to know what should hold value long term. I would look at anything current as more speculation (which you can make money on and also lose money on).

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