December 1, 2022

3arabstar

healthy part of faith

Investing in Sports Cards

5 min read

Remember trading Ken Griffey Jr., Sammy Sosa, and Mark McGuire baseball cards with your friends? The gum, the smell of a new pack of cards, and the thrill of getting a player you really wanted. Of course, kids weren’t so much “investing” in the cards as they were coveting the players they loved in this childhood rite of passage.

Today, depending on what decade you collected, maybe those cards can turn out to be an investment (as long as you kept them packed away in pristine condition, that is).

Sports card trading is still big business. A 2021 eBay report found U.S. trading-card transactions on the company’s platform surged 142% in 2020 over the previous year. And eBay predicts new investors will flock to sports cards as a diversified addition to their portfolios. But is sports card investing a good place to put your money today?

Key Takeaways

  • Sports card collecting once was a childhood rite of passage; adult investors may still enjoy buying sports cards for the love of collecting, their favorite sport, or a particular player.
  •  Having a diversified portfolio means most of your investments should be in stocks, bonds, and possibly alternative assets such as real estate, but a small portion can be invested in assets such as sports cards, coins, or stamps, which can fluctuate with supply and demand.
  • Card sales surged 142% during 2020, likely because sports fans had more time on their hands, but eBay predicts the market’s continued growth.

Learning About Sports Cards

Trading cards, or collectible cards, have been around since 1886, when Goodwin Tobacco, owner of several cigarette brands, introduced a baseball card set consisting of 12 New York Giants players (known as the N167 set). They were sold in packs of candy and cigarettes to stiffen up the packaging.

Today, the four major U.S. sports leagues, the National Football League (NFL), the National Hockey League (NHL), the National Basketball Association (NBA), and Major League Baseball (MLB), all have exclusive deals with a single card manufacturer that produces that league’s cards. The NBA and NFL each have a deal with Panini America, which expires in 2026. The NHL has had a deal with Upper Deck for its player cards since the 1990-1991 season and in 2021 extended the partnership into the NFT market. Also in 2021, the MLB ended its partnership with Topps and in 2022, signed a deal with Fanatics to produce baseball cards and NFTs.

Not only did Fanatics land the MLB, but they also have exclusive deals with the NFL and NBA to produce cards starting in 2026. Investors wonder if the change could cause volatility within the sports card industry.

Most sports cards follow the same format: A picture of each player appears on the front, along with the player’s name, team, and, sometimes, their player statistics. The back of the card may include decorative details, additional biographical and personal information, and more statistics.

Players signing their cards began with baseball cards in the 1970s and proliferated though the ’80s. For an admission fee to a signing event, collectors could bring a baseball card or get a signed photo with their favorite player. The autograph industry exploded the value of cards for highly sought-after players such as Mickey Mantle and Joe DiMaggio.

Autographed sports cards account for some of the greatest growth in market share for this type of collectibles today.

The Sports Card Market

According to a 2021 report called “Sports Trading Card Market Size By Type, By Application, By Geographic Scope And Forecast,” published by a firm called Research and Markets, the global sports trading market was valued at more than $13 billion in 2021 and is projected to reach over $49 billion by 2032.  That’s a forecast compound annual growth rate (CAGR) of 13% over 11 years.

However, this global investment market faces some challenges. Collecting sports cards has waned in recent decades with the explosion of the internet. Kids, who were a large sector of the market in past generations, have switched their interests to games such as Pokémon and other types of video gaming in which the real-life players they follow can appear. The increase in card prices, market saturation, and declining awareness of the pastime have also played a role.

Yet sports-card investment returns continue to be impressive. Baseball card collecting, in particular, is one of the largest segment of the card-trading industry, and demand is propelled by many collectors who continue to invest in cards because they still enjoy their childhood pastime.

Buying and Selling Cards

If you’re interested in investing in sports cards, you should do your homework about the industry. Yet opinions, passions, and interest in sports leagues and their best players are the driving factors that guide most investors. That said, you should decide if you’re investing to hold onto cards for the long term or if you are looking to make shorter-term profits. As an example of some cards’ elevated value, in 2021, a 1952 Mickey Mantle rookie card sold for $5.2 million and a 1997-98 game-worn jersey patch card from former Chicago Bulls star Michael Jordan sold for $2.7 million at auction.

But sports card investing isn’t always so rosy. Card values can fluctuate, and a lack of tangible value for them can make card investing risky.

Diversifying your collection is also a must. If you were to only invest in one series of baseball cards, for instance, and they fall out of favor, that would be akin to putting all your eggs in one basket.

Collecting various sports, players, series, generations, and types of cards could provide needed diversity to a card collection.

You can purchase cards through trade shows, eBay, online, or at in-person auctions. Card collectible-specific retailers also exist in some large cities.

Devising a specialized sports card investment strategy is also advised. Consider trading in rookie cards, cards with printing errors, or autographed cards, for instance. You also could put your money into cards from certain sports you have an affinity for, or particular players whose cards you think will improve in value over time.

Sports Card Investment Strategies

Investing in sports cards can take several forms, including: 

  • Card flipping, which is buying a card with the intent of selling it at a profit in a short time.
  • Buying a card and holding it longer, perhaps up to 10 years.
  • Buying cards you enjoy, of players you like or those that you think could increase in value in the future.

The Bottom Line

Always set an investment budget to work with so you’re not tempted to overspend when you come across a rare card online or at auction. At the same time, to protect against volatility or declining value in sports cards, most of your investments should remain in traditional holdings like stocks, bonds, and real estate, with only a small portion of your investment funds tied up in a collectible asset such as sports cards.

Are Sports Cards a Good Investment?

Sports cards can be a good investment, but the majority of your investments should be in traditional vehicles like the stock market. Investing in sports cards can be a way to monetize your hobby.

What Is the Most Rare Sports Card?

The Honus Wagner T206 tobacco card. Baseball historians say Wagner, whose career began in 1897 and lasted 20 years, was a true great.

Are Sports Cards from the 1980s Worth Anything?

Cards from the 1980s, especially rookie cards, can be very valuable and have held their value well.