Before You Buy That Collectible .(.(.

Sunday, August 23, 2009

-- Exercise caution when speculating on collectibles. Retail dealers will sell at market price, but buy collectibles back at a fraction of what the market says they're worth, said Michael Walther of Oak Wealth Advisors.

-- Insurance and storage costs for collectibles can eat at investment gains, so consider them before buying, Walther said.

-- Don't buy into collectible markets all at once, advised Marc Henn of Harvest Financial Advisors. Unlike stocks, guitars are not traded and scrutinized on a public exchange, so true valuations may be hard to come by.

-- Don't buy collectibles with money you may need on short notice. A guitar, for example, can be difficult to unload quickly at a fair price, Henn said.

-- Avoid pumping money into popular collectibles, financial advisers say. Everybody else probably already has, inflating the price.

-- Buy collectibles you'll enjoy looking at (art) or playing with (guitars), and make investment returns secondary, the experts say. Enjoyment can make wild price fluctuations, even big losses, bearable.

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