Should I Invest in Comic Books?

Are comic books a smart investment choice? In general terms, the investment returns on collectibles is inferior to that of the stock market and real estate. Sure, they have grown in value over the years, but for your serious money, there are better places to put it.

My advice: fund your 401k and Roth IRA every year; buy mutual funds and real estate! Those ought to be the foundation. Don't think that comic book investing is going to make you rich. I wouldn't recommend that anyone have more than 10% of their net worth invested in collectibles. I personally have between 2 and 3% of my net worth in comic books and I consider that a large amount.

By way of clarification, what I am calling "investing" is the practice of buying something of value, holding it for a time, then selling it for a capital gain. The change in value as a function of time is the investment return. Other means of making money on comic books such as buying and then reselling (a.k.a. flipping) soon afterwards is not what I'm calling "investing" on this site. That is more of a dealing or trading activity rather than investing.

There is an excellent Investopedia Article on the pros and cons (mostly cons) of investing in collectibles.

For me, comic books ARE a kind of investment, but not a particularly serious one. I look on it as a "mad money" investment. I truly believe that by buying wisely and holding for a long time, that my books will grow in value. I’m even optimistic that they’ll do better than inflation. That being said, I am well aware that my books might not grow in value at all. I'm certainly not counting on their growth to fund my retirement or my kid's college educations. I have other investments for that. You should too.

I buy comic books because I've loved them for a long time and because they are valuable. And it's not just the art, the stories, and the lore of comic book history that fascinates me. It's also the way that they have increased in value over the years. It's fun to think about how you could have picked up an Amazing Fantasy #15 for a few bucks back in the 60s or 70s and now have something worth more than a house. That's cool. It's also cool to pick up a book and say "This is the 2nd highest graded of this book and it's worth over $500..." Do I hope that the same book will be worth $1000, ten years from now? You bet I do!

The fact that key and/or high-grade issues are recognized by the collecting world as having that kind of value adds to their mystique and prestige. The possibility that they may continue to grow in value adds to the excitement and fun of the hobby. I do look at my Silver-Age books and allow myself to hope that they will grow in value the same way that Golden-Age books grew in value between the 80s and now. However, if they don't, I haven't invested more than I can afford to lose. Besides, I'll continue to enjoy owning them. They will always have value to me.

Buying these rare, key books, is a way for me to celebrate the financial success that I've attained over the years. Back when I was a struggling college student, I was certainly aware that there were books worth thousands of dollars out there in the world. I knew that I couldn't afford them, but even at that time, I thought "how cool it would be to be able to own comic books like that!" Now that I can, I'm lovin' it!

While investing in comics may be worse than investing in stocks, mutual funds or real estate, it is arguably a better investment than gold, the lottery, day-trading, cars or any number of other places you could put your money. Just because it's not the best investment for your money, it is far from the worst. If you get personal satisfaction from owning the books, the investment returns are a bonus.

If this essay resonates with any of you, let me know.

Elements of this post originally appeared in a discussion on the CGC boards that you can read here

See also

About the Author (at the end I tell you where my money is)

What Comic Books are Included in the SCPI?

The following principles were considered when selecting comic books for the SCPI index.

1) Select books that are frequently traded. This provides more data. Also, these issues have greater relevance to the market since they represent what more collectors are trading.

2) Select key issues. This tends to create the same list of candidates as the first criterion. Key issues have much higher numbers in the CGC census and thus generate more trades.

3) Select books that have values in the range of greatest relevance to "rank and file" collectors.

This last criterion requires explanation and I'll admit, that some decisions that I made were arbitrary.

In the post What is your most valuable Silver Age Comic book worth?

I shared the results of a survey of Silver-Age Collectors with regard to their ten most valuable Silver Age books. The results are shown below. As I explained in the previous post, there is a large population of collectors whose "best book" is worth $401 to $3000. Similarly, these collector's "next 9" most valuable books had an average value of $201 to $2000.


Based on these results, it seemed the most practical to choose issues for the index with values in the range of approximately $200 to $3000. In fact, the actual samples, as shown in the table below span a range that slightly exceeds these bounds.


A study of the table above shows that the issues selected span the range of $177 to $3311. Of the issues selected, 68% are worth less than $1000. I did this in order to best represent the typical "top 10" of the average collector from the survey (with a median value of $700).

So many times, I've read about the phenomenal increase in value of a near-mint Action #1 or some other "Premier" comic book. I chose to steer away from this with the SCPI. I hoped to create an index that represented "middle class" or "rank and file" collectors. Besides, I suspect that every Premier collector with a few books worth $30k and up also has books worth in the SCPI range of $200 to $3000 in their CGC boxes or file cabinets. Finally, from a practical point-of-view, those Premier books are traded too infrequently to be useful within a price index.

By tracking the middle to high-value books, I'm believe that I have made an index that is relevant to the majority of collectors. Let me know what you think!

SCPI Performance 2002 to 2006

The SCPI is the Silver-Age Comic Price Index. It is a composite of prices for 32 frequently traded key Silver-Age books.


From 2002 through 2006, the SCPI grew 388 points or 38.8% This is an average of approximately 9% per year. The period from 2002 through 2004 saw growth of 295 points, while the period from 2004 to 2006 accounted for only 93 points. In other words, prices rose steeply for the first two years, then grew slowly for the next two years. Note: in another post I will show that 2007 is looking strong so far.

The issues that contribute to the SCPI are weighted so that the higher market share titles make up a larger part of the composite. The graph below, shows the SCPI again, but this time you can see the contribution of the various titles.


All of the "big 3" Silver-Age titles, ASM, FF and X-Men rose in the 4-year period. However, as a percentage of their 2002 values, Amazing Spider-man rose a little less than Fantastic Four or X-Men. This may be due to the fact that by 2002, ASM were already far more expensive than comparable issues of the other major titles. For example, between 2002 and 2006,

• ASM #14 in CGC 7.5 rose from $727 to $1011 (39% gain)
  
• X-Men #12 in CGC 8.0 rose from $199 to $314 (57% gain)

These issues both represent important first appearances by major villains (Green Goblin and Juggernaut) they are also similar in grade and age. However, in 2002, the ASM was already valued at 3.5 times that of the X-Men issue. Perhaps the other titles were catching up a bit with the already impressive growth of ASM prior to 2002.

This observation may lead a speculator to a somewhat contrarian stance. That is, invest in the titles that are currently out-of-favor because they have the most potential to grow. Indeed, the table below shows the SCPI issues ranked by market performance.

Top performers included Journey into Mystery, Tales to Astonish and Tales of Suspense. However, before you rush out and buy every minor title key, consider the dismal performance of Captain America, Daredevil, Incredible Hulk, and Batman. Like stocks of larger companies, more popular titles deliver consistent, but less exceptional performance. Lesser-known titles offer the potential for higher gain but with more inherent risk.

Contrary to popular opinion, some of the best performing books are in the low or mid-grades. Keep in mind, however, that these low and mid-grade books are "super-keys" like TOS #39 in 4.0 (first appearance of Iron Man). I don't know if a typical Silver-Age book in 4.0 would have experienced this kind of growth.

In conclusion, Silver-Age key issues have shown a healthy increase in value since 2002. Furthermore, while the gain has been more than inflation, it has not been so rapid as to be obviously unsustainable.

See also
What Comic Books are Included in the SCPI

Why Create a Silver Age Comic Price Index?

About the Author

this is a place-holder for an article to be published in the next few weeks

SCPI FAQ

• Why Create a Silver-Age Comic Price Index?
  
  
• Should I Invest in Comic Books?
  
  
• What Comic Book Issues are Included in the SCPI?
  
  
• About the Author
  
  
• Where Do You Get Your Price Data?

Why Create a Silver Age Comic Price Index?

Everybody knows that key issues of comic books have increased in value over the years. In 1982, a Fantastic Four #1 in Fine condition was valued at $550*. In 2005, the guide value was $2650 and today the book is worth $3150*.

Not bad. However, this doesn't tell the whole story. In 1987, the guide value for the book had dropped to $500. That's a 10% loss over five years from 1982 to 1987. That's a pretty long period of price stagnation. Did all comic book prices experience stagnation during this period, or was it just this issue? Was it simply a matter of mid-grade books losing favor as more collectors moved to high grade? Or, did the Fantastic Four title lose out to other titles for a time? After all, the X-Men were hot in the 80s....

Honestly, I don't know. You hear stories, dealers talking about titles being hot or cold. Or, people giving advice that this or that grade range is the "best investment." While I'm certain that many dealers and experienced collectors are more often right than wrong, I have seen very little in the way of analysis trying the capture what the overall Silver Age market is doing.

Since the advent of CGC graded books and GP Analysis the data is out there. However, it's currently very difficult to see the forest for the trees. Sure, there was just a sale of a Fantastic Four #1 in CGC 6.0 for a record-breaking $7500 in August of '07. That would seem to indicate that the market for key Silver Age books is strong indeed. How much have prices increased over the last couple of years 5%, 20%, 100%??? What are prices doing this year?

The purpose of this blog is to create and track objective metrics that represent the value of key silver age comic books. Think of the Silver Age Comic Price Index (SCPI)** as a sort of Dow Jones Industrial Average for Silver Age comic books. In case you didn't know, the DJIA is a composite of 30 stocks from the biggest companies in the USA. The companies represented in the Dow are well-known companies like IBM, GE, HP, and Boeing. The Dow is widely watched because it is thought to represent the ups and downs of the overall market. IBM could have a bad year while Boeing has a good one. However, if you want to know how the market did overall, you look at the Dow.

The SCPI is a composite index of 32 key issues of the Silver Age. While all of these books are highly-regarded key issues, some have risen rapidly in value, many have risen slowly and a few actually decreased in value. Overall, the SCAPI has risen an average of just under 10% per year from 2002 to 2006. How is the SCAPI doing in 2007? Well, from January through September it's gone up about 8.3% . If your reaction to this news is "who cares?" then thanks for reading this far and I'm sorry that this blog probably isn't for you. However, if I've whetted your appetite with these figures, read on!

Beyond the SCPI itself, I will also share the performance of the issues that make up the index. Furthermore, I am considering adding more indexes beyond the SCPI. Maybe a high-grade Silver Age index or a mid-grade index. Your suggestions are welcome!


* Overstreet Price Guide

** I pronounce it "Skippy" in my head.

What is your most valuable Silver Age Comic book worth?

About three weeks ago, I performed a survey on the CGC boards. I wanted to find out more about what Silver Age collectors owned in terms of their most valuable comics.

When asked "What is the value of your most valuable Silver Age comic book?" There was a wide range of responses as shown here.

Notice that there is a strong mode or peak in the distribution at $801 to $1500. The "buckets" on either side of this mode are also well populated such that 45% of all respondents had a "best book" worth $401 to $3000.

It is important to note that the population is clearly bi model. That is, there is a separate and distinct 15% of the population of respondents who answered that their best book was worth more than $25,000. Indeed, adding in the two other top buckets, 20% of respondents have a book worth over $8000.

In the same survey, I asked collectors "What is the average value of your next 9 most valuable SA comic books?" Just like with the "Most valuable" distribution, there is a strong mode around the median. This time, the median is about $700 or about half of the value of the "most valuable" book. There is a pack of 45% of respondents whose next 9 books have an average value of $200 to $2000.

By now, you may be asking "What does this have to do with comic book price indexing?" Okay, we all know that comic book collecting spans comic books that you can by for less than a dollar to books worth six figures. An index that would attempt to track price appreciation for all books in this range would be meaningless. Just because a Fine- AF #15 has appreciated 50% over the last five years, does not mean that your X-Factor #20 that you bought for $1 has appreciated 50% over the last five years.

The goal of creating a Silver Age Comic Price Index is to track comic book price changes in the range of book values that are relevant to what I will call "serious collectors". What I'm calling a serious collector is a person who collects comic books that are expensive enough to matter. Also, while most collectors have long boxes full of comics worth only a few dollars, the index attempts to track the prices of the books that matter. These are your prized books. The ones either in the display case, on the wall or in a safe. You spent serious money on these books and if these move up or down in value by 30%, that change is going to be pretty significant to you.

Test.

When you sign up, I'll switch the admin function to your account.