Based on an article from CNBC’s Special Report (for more details, please go to http://www.cnbc.com/id/39444167), it mentioned 8 rules to remember before you invest.
Below is a summary of the article and I will comment on how it will apply if you are collecting music memorabilia:
1. Don’t fall in love with your investments.
Yes, if you buy something from your heart and love it, don’t assume that it will go up in value. Otherwise, it will painful to part your memorabilia. But for an investor, you will have to buy something you believed that it will go up in value.
2. Go with the tried and true.
Besides Frank Sinatra, others like the Beatles, Elvis, Michael Jackson, — will increase in value over time.
3. The law of supply and demand is in effect.
Especially when the artist had passed away and no longer signs autographs, the demand would remain, but supply would decrease over time.
3. The law of supply and demand is in effect.
Especially when the artist had passed away and no longer signs autographs, the demand would remain, but supply would decrease over time.
4. To get top dollar on an item, it has to be “pristine” or museum quality.
Like the rule said, a memorabilia has to be in top condition in order to generate top dollar value. So before buying please check the quality and maintain the “pristine” after owning it.
Like the rule said, a memorabilia has to be in top condition in order to generate top dollar value. So before buying please check the quality and maintain the “pristine” after owning it.
5. The market is fragmented.
Besides Sotheby’s, Christie’s and Julien’s, there are also specialty dealers and auction houses. You can also buy and sell on eBay.
6. No matter whom you deal with, make sure they are reputable.
Besides they are reputable, you have to also make sure that it’s authentic.
7. Prices fluctuate.
The value of memorabilia will not always appreciate linearly. Prices do fluctuate when economy is in recession. Other factors like death of the artist would increase in value.
8. There's no explaining taste.
My wife and my kids probably will think that my collections are junks to them. If you going to pass down your collections to them, make sure you do explain to them what to do with it.
“The memorabilia market is not only vast, it is also dynamic and sometimes unpredictable. Diamonds are forever, but the same can't be said of cultural icons.”
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