Monday is shaping up to be a bloodbath in the markets, both traditional and crypto, and a lot of panic is in the air.
As you look at your card and memorabilia collection, what should you be doing?
Here are 10 tips that will put you into a good position.
1. Know why you buy
The first thing you need to do in times of fear is to know why you collect. Do you collect because you love it and it's a passion? Do you collect to make money? Or is it a little bit of both?
2. Know why you sell
When you do sell, why do you do it? Do you reinvest the cash into something else or do you use it to pay off bills or go on a vacation?
3. Winning requires losing
In order to win, you must understand how to lose. Markets within collecting and memorabilia fluctuate, and the best investors take losses in one category and turn then into wins somewhere else. Ask yourself: What is my opportunity cost? What can I buy with my loss?
4. The price you bought something at has nothing to do with the price you should sell it at
This is one of the worst things I've seen in this space. The whole "Well, I'm into it for this, so ..." How important something was to your collection when you bought it changes over time. Populations change, too.
5. Write down the current comp
Many people avoid looking at the market when it isn't good. It's classic human behavior. But it also doesn't allow a collector to be realistic. Accepting current comps helps one get over the idea of parting with something.
6. Knowing what you will buy will help you get over the idea of selling
What's your next market? What's your next move? If you aren't turning what you have into cash and you are intent on reinvesting, where are you putting it? And why is the time to shift the money to that sector right now?
7. Don't be scared of the open market
Another systemic problem in this industry is fear over what the market price will be. People head into markets, but set unrealistic reserves. Is today's market completely transparent? No. But it's as transparent as it has ever been. No card, ticket or piece of memorabilia that is worth anything will be looked at if it's a seven-day auction on eBay. This isn't like a gambling result where it is all or nothing. You are getting something back.
8. Patience is a life position rather than a strategy
Patience in the markets is usually a positive thing, but not everyone can afford patience. We're a gambling society, and people are more leveraged than ever before. Whether you sell right now is less about believing in an active player and more about whether you are nervous about your stocks or Bitcoin holdings. Hold if you can afford to hold and you believe in what you have. Sell if you can't sleep at night.
9. Know who collects what you collect
This is one concept that I feel people pay the least attention to. You need to know the demographic of who collects what you collect, so you can smartly make decisions on what you want to do. Modern basketball will get hammered in times like this because it's young people who are deep in, and they can't afford to hold out the same way a 50-year-old can.
10. Selling quantity to upgrade to quality makes a lot of sense
If you feel like you have to sell and you are a re-investor in the market, one good rule of thumb is to cut down on the total number of pieces to get more high-end pieces. Owning the best of the best is generally a good rule. So, if you are a $100 card guy, sell 10 to get a single $1,000 card. It's not perfect, but high-end collectibles have a better chance to rise over time.
Darren Rovell is the founder of cllct.com and one of the country's leading reporters on the collectibles market. He previously worked for ESPN, CNBC and The Action Network.