I share Joe's perspective regarding my collection as an investment. I do it because it gives me pleasure. However, given the cost of a collection, one does see it as a part of ones estate. My opinions follow and apologize in advance for getting on my soapbox..
Militaria as an investment is not as fungible and liquid compared to a security. Less people want to buy it than say, stock. It occupies a position in one's portfolio such as art. A key to ensuring militaria weathers the cyclicity common in all markets is to buy only the best pieces, say top 20% of the market. Values of top quality pieces are less volitile than common ones. Better to save your money and buy one or two high quality items than amass a collection of common, average pieces. In a down cycle, such as now, you could be left holding the bag if you must sell. At the end of the day, an item is only worth what someone is willing to give you at the time you decide to sell. Harsh perhaps but it is realistic.
Is the Hobby Dying? IMO no. However, it is going through a market correction. Those who bought when prices were higher than they are now, such as myself, may be disappointed if you must sell today. Just like securities, don't panic when the market drops. Don't sell at a loss if you don't have to. Wait for the upswing if you can and it will. Timing of these corrections in collectables traditionally mimic the economy and stock market but tends to lag. Anyone know what the Dow closed at Friday? Hang in there, prices will begin to grow again.
Lastly, why do some dealers get high prices for their items when an individual can't? People pay for their expertise (deserved or not). They have a global distribution network, advertising and reputation. Same for auction houses. I for one have paid a premium for what I considered is added value by using certain dealers. Given the increasing quality of reproductions, the new collectors entering the hobby often are more comfortable and feel they won't be taken advantage of if they do business with well known dealers. As for the high prices some dealers have on their items, they are not trying to rip people off. They are business people. They can ask anything they want. They themselves have often had to pay more in the past and would rather sit on it than take a loss. Remember, they are a global business. The economy of the US is not always representative of the rest of the planet. If you don't like their prices, don't buy from them. Sooner or later supply and demand of a capitalist system will require them to bring prices in line with demand or they go out of business with a nice collection. Demonizing quality dealers I think is often unfair. They are a business and not a charity.
At the moment, I am buying while prices moderated. A lot of nice high quality items coming on to the market as well.
Thanks for indulging me,
Rick
