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15% of MoneyMade members invest in Sports Cards
Sports Cards Returns vs S&P
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6 minutes ago
Does not follow the Stock Market
Sources: PWCC 2500, SPX
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In the Market
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Buying and selling sports cards has historically taken two forms: an expensive investment class for wealthy enthusiasts and a hobby for sports fans. Recently, the blue-chip cards that wealthy enthusiasts purchase have become more accessible to everyday investors via fractional marketplaces like Otis, Collectable and Rally. While these markets offer access to top-notch assets with the potential for double-digit returns, liquidity is difficult, and as such, sports cards investors should expect to hold their position for many years
Did you Know
An autographed Lebron James rookie card sold for a then record-setting $5.2 million in April 2021. In July 2020—not even a year earlier—that same card sold for a mere $1.6 million.
Industry analyst David Yoken estimates the value of the sports card investing business at $5.4 billion on the low end.
Notable sports card investors include rapper Quavo, Snoop Dogg, and DJ Steve Aoki, who founded and owns a brick-and-mortar sports card retail operation called Cards and Coffee.
Capture a piece of a growing market — the sports card industry is worth billions and is projected to grow throughout the 2020s with multiple companies going public within the next year
Investing in sports cards adds a tangible asset to your portfolio with financial and emotional upside
Returns for blue chip sports cards (PWCC 500) have beaten the S&P over the past decade
Reasons to Invest
While sports nerds might be able to predict a winning card here and there, investments in sports cards are largely speculative. You never know if a given card will appreciate in value over time.
If you buy physical sports cards, you'll need a solid storage method, which can involve extra costs. The condition of a card is integral to its value.
This is a very illiquid investment, meaning you can't convert it to cash quickly and easily. You'll need to find a buyer who's willing to pay what the card is worth, and that can take time.
How You’re Taxed
If you are investing on a sports card investment platform like Collectable, where you own a fraction of or a % of a card:
- Sale of card: If the card is sold, you receive the equivalent of a dividend. Your profits are then taxed as income.
- Secondary market: If you trade your shares on the secondary market, your profits are taxed as capital gains.
For those of you selling a sports card you purchased, card investments are classified as 'collectibles.' Gains on cards held for one year or less are taxed as ordinary income—the same tax treatment as short-term capital gains (STCGs). Gains on cards held more than one year are taxed as ordinary income, except the maximum tax rate is 28%