VOL. 127 | NO. 8 | Thursday, January 12, 2012
Rays of Wisdom 
Dana and Ray Brandon
Don’t Let Possessions Mar the Art Of Investing
By Ray and Dana Brandon
Ray’s Take With an erratic stock market and banks paying virtually no interest, it’s no wonder people are looking for alternative investments. There’s been a buzz lately about something I haven’t seen interest in since the 70s – art and collectibles as investments, and I have two words to say about that: Bad idea.
The fact is, possessions of any type usually don’t make good investments. This doesn’t mean they can’t be quite valuable, but their value is based strictly on what the market will pay and not their intrinsic worth.
The main factor that drives the value of possessions like antiques, art, jewelry, baseball cards and the like is emotion, such as pride or nostalgia. The value of a stock, in contrast, is based largely on company performance, income generation, etc. In addition, the market for any category of possessions is quite thin, making it very difficult to find a buyer when you need one.
That is the biggest problem with possessions as an investment – you cannot easily turn them into cash or another investment. With stocks, bonds or other traditional investments, there is always a market ready to buy at a moment’s notice. This is simply not the case with possessions.
Still, artwork, precious stones, and collectibles of all types are often promoted as worthwhile investments. There are countless smooth operators pushing these items on unwary consumers as smart options. Don’t listen. Whether it’s diamonds, hand-knotted rugs, artworks, antiques, or comic books – personal possessions are seldom sound investments.
I mention comic books because “Amazing Fantasy #15” recently sold for $1.1 million. It originally cost twelve cents. That’s certainly a huge return, but it’s also strictly luck, driven by a market that currently values super heroes but might not five years from now.
It’s OK to value your possessions; just don’t purchase them as investments. When the time comes to sell them, they are far more likely to disappoint you, rather than reward you.
Dana’s Take There is one return on investment you can and should expect from your personal possessions, and that is pleasure. A piece of art that inspires you when you look at it is worthwhile for that alone. But don’t mistake the pleasure you receive from owning something rare or beautiful with building wealth.
If you’ve ever compared the appraised value on jewelry with what the market will pay for that jewelry, you know it’s no investment. Accruing possessions just for the sake of owning them is not particularly good for your wallet or your well-being.
Instead, invest time in family and friends, building memories and stronger bonds. Invest in charitable organizations – both time and donations – to help improve your community as well as provide personal satisfaction.
These are investments in your life now and the payback is not only immediate, it is forever.
Ray Brandon is a certified financial planner and CEO of Brandon Financial Planning (www.brandonplanning.com). His wife, Dana, has a bachelor’s degree in finance and is a licensed clinical social worker. Contact Ray Brandon at raybrandon@brandonplanning.com.