Collectible Cues as Investments
For a balanced portfolio, money managers might recommend some holdings in collectibles as inflation fighters. When it comes to collectibles, I would think one should be more concerned with return OF investment than return ON investment.
While I collect as a hobby, it is nice to know that the hobby might return some value and may also appreciate in value. At least I don't want to lose a lot of money on it.
So I began thinking, what kind of return is there historically on cue collecting?
Some of my on-line cohorts and I recently did a small study. We took cue dealers mailers from the 1992 - 1994 hot cue collecting time period, deducted 10% from the selling price at the time (for haggling room), and took today's approximate market value of the cues. We received input from several big collectors and dealers on the pricing, and compared prices on 33 randomly selected cues from the mailers. I used variety to get a fair sampling. Here is the page where the mailers were listed:
I was pleasantly surprised to find that cues were not only "pretty", they were actually "pretty good investments". At least these cues were. Of course, this is assuming one buys collectible cues. This means a cue of historic or artistic merit, made by a famous maker and held for a reasonable length of time. In reality, very few cues meet this criteria. Hundreds of thousands of cues are made each year, but only a select few will be prized as collectibles10 years from now.
Here's what we found:
The average cue appreciated 113%, or 10% annually.
Cues purchased in those years with a value of $62,815 were worth $137,170 today.
The initial investment of $62,815 adjusted for inflation is $80,184 in today's dollars.
Cues outperformed inflation by over $56,000.
$62,815 invested in a savings account at 2.5% interest compounded annually would yield $19,999 compounded interest, while the cues appreciated $74,354.
While I would not advocate collecting cues as an investment, it is nice to see that
it is a hobby which can be profitable! Take a look at the spreadsheet.
