Sports card investing can be a great way to make extra income. Card values such as Mike Trout rookie cards, Lebron James rookie cards, Tom Brady rookie cards, Wayne Gretzky rookie cards and more increased significantly in the past few years, and in some cases, resulted in million-dollar pay days for sports card investors.
That said, not every person who chooses to invest in sports cards realizes a positive return on their investment. Card values fluctuate constantly and the lack of tangible value, such as cash flow from an operating business, makes sports card investing risky.
Sports card investing may sound easy: find the players who are doing well, buy their cards, and watch the price sore to new heights.
The challenge is it is not that straightforward, and many new collectors and investors do not know how to get started. Here are seven steps to help you get started in sports card investing.
- Decide how you want to invest in sports cards
- Set a budget for sports card investing
- Select the player(s) to invest in
- Identify the card(s) to invest in
- Determine value of target card(s)
- Purchase your card(s)
- Manage your sports card investment portfolio
1. Decide how you want to invest in sports cards
There are several different approaches you can choose from when investing in sports cards. As you get started with sports card investing, you should decide which approach is best for you. Below you will find three different approaches to choose from.
A. “I would like to make money by flipping sports cards.”
The phrase ‘flipping sports cards’ refers to the concept of buying a card with the intention of reselling the same card at a higher price quickly, usually within the next few months.
This approach can work well, especially if you find a player who is quickly rising in popularity. One notable example is Fernando Tatis Jr.’s Topps Chrome rookie card which increased more than 5x from January 2020 to August 2020 (Shop on eBay).
That said, this approach can also be very risky. Buying a player simply because he is hot does not guarantee a positive return on your investment especially if the card values have already increased significantly for that player. Using the same example, people who bought in August may have lost money because of the card decreasing in value after August.
B. “I would like to make money by buying and holding sports cards long-term”
In contrast to flipping sports cards, you can also choose to buy and hold sports cards for a longer period, typically a year or more. The longer hold period is the main differentiator between the first and second approach.
Warren Buffett would likely prefer this approach. As Buffet once said about stocks:
“Only buy something that you’d be perfectly happy to hold if the market shut down for 10 years.”Warren Buffett
The main benefit of this approach is it forces you to think long-term. With this approach, you would ask yourself, “will this player still be relevant 5-10 years from now?” If the answer is yes, he / she may be a good player to buy.
C. “I do not care about making money, I just want to collect sports cards.”
The first experience with sports cards for many collectors has nothing to do with making money. Instead, it is about the joy of opening packs with hope of discovering a rare card or simply a new card of a favorite player.
The approach you choose will impact decision you need to make in the remaining steps. Once you have decided on your approach, it is time to set your budget.
2. Set a budget for sports card investing
The new sports card investor typically has two questions at this point in the process:
A. How much money do I need to get started with sports card investing?
I believe $5 is enough to get started with investing in sports cards. Even the best players in the world have low priced cards for sale. See for yourself:
- Lebron James cards on eBay
- Tom Brady cards on eBay
- Mike Trout cards on eBay
- Sidney Crosby cards on eBay
That said, I invested ~$10,000 in sports cards in 2020 and will likely invest a similar amount in 2021. In addition, cards are regularly selling for $100,000+, so I know people are spending much more than I am on sports cards.
Therefore, the minimum to get started is low, but the sky is the limit.
B. How much money should I invest in sports cards?
I will tread carefully with this question as I am not a financial advisor and will not give you a specific number for how much you should invest in sports cards.
However, I will share my personal approach. I view sports cards as a fun investment, not my primary investment vehicle.
What does this mean exactly?
It means that I invest 90%+ of my money in stocks, bonds, and real estate, and only invest a small amount in sports cards.
I personally view sports cards as a relatively risky investment, but I enjoy doing it, so I continue to invest and add to my collection.
The amount you choose to allocate to sports cards is your decision. I would just be cautious of anyone who promises you a “guaranteed return” or “easy money” and would remind you that any investment in sports cards includes risk.
3. Select the player(s) to invest in
The new sports card investor can typically select players in one of three ways:
A. Invest in cards of your favorite players
This is the most obvious way to select a player to invest in.
Ken Griffey Jr. was one of my favorite baseball players growing up and as a result, I have several Ken Griffey Jr. rookie cards.
I happened to stumble upon the bonus of receiving a nice return on my investment over the past few years, but the original catalyst for the purchase was simply to buy the card of one of my favorite players. You can do the same.
B. Invest in cards that are undervalued
This is easier said than done, but every year several players’ cards increase significantly in value. I believe it is possible to identify undervalued cards, but it takes a lot of data and analysis.
I will write a post dedicated to some of the analyses I do to find undervalued cards and will update here once that post is published.
C. Invest in rookie cards of popular players
One of the lowest risk sports card investments you can make is buying rookie cards of current or future hall of fame players. Several examples of my favorites are listed below:
- Clayton Kershaw rookie cards on eBay
Did you notice a theme? Yes, I am a Los Angeles sports fan.
However, the point is not the focus on Los Angeles, but instead the focus on current or future Hall of Fame players who have already established a legacy in their respective sport.
The legacy is important because it means the player will be collectable for years to come. The ongoing demand for a specific player’s cards lowers the risk of the investment, thereby making this approach a simple, relatively low risk investment approach and a good starting point for new investors.
4. Identify the card(s) to invest in
The new sports card investor often has two questions at this point in the process:
A. How do I identify investment options for a specific player?
After you have selected the player to invest in, the best type of card to invest in is usually the player’s rookie card. Rookie cards are frequently exchanged by sports card investors and command the highest prices in the sports card market.
The challenge is, there are often many variations of rookie cards to choose from. As a result, I recommend using a rookie card checklist to identify the options. Here are several examples from Sports Card Research:
- Joe Burrow Rookie Cards
- Justin Herbert Rookie Cards
- Bryce Harper Rookie Cards
- Zion Williamson Rookie Cards
As you can see, there are 70+ variations of Justin Herbert rookie cards such as those listed below:
B. How do I decide which card to invest in?
There is not a “right” rookie card to invest in. It really depends on your personal preference and budget.
That is why Sports Card Research has done a lot of the work for you by enabling you to find autograph cards, jersey patch cards, college jersey cards, and more, all at a variety of price points.
For the new investor, popular and lower priced rookie cards are typically the best place to start. For example, the Donruss Justin Herbert Rated Rookie would be a great choice for an entry level Justin Herbert rookie card investment. The card is popular among sports card collectors and investors and more affordable than other Justin Herbert rookie cards.
5. Determine the value of your target card(s)
The best way to determine the value of your target card(s) is by looking at historical transaction prices. There are two common ways to do that:
View historical transaction prices on eBay
To view historical transaction prices on eBay, follow these steps:
- First: Search for your target card (e.g., “Justin Herbert Donruss Rated Rookie”)
- Second: Select “Sold Items” from the left-hand column (image below)
- Third: Optional – Select “Auction” from the top navigation menu. eBay does not publish prices on Best Offer items, so you may be misled on card price if you do not filter for “Auction.”
View historical transaction prices on 3rd-party platforms
There are several 3rd-party websites that maintain historical transaction data from eBay. I use PWCC Market Price research because it is free, has a clean user experience, and has price data going back to 2004.
Regardless of which platform you use, I would recommend that you do following:
- Review at least the last 3 transactions for a specific card. Card prices fluctuation frequently and sometimes a card will sell for more than other cards sold around the same time. We can call this the ‘current price.’
- Review the price trend over the past 6-18 months. I like to go back 18 months, especially considering how much card prices increased in 2020. The historical context helps me understand the price in relative terms.
- Optional: compare the price of the card for your target player to the price of the same card for a different player. For example, if I am buying a Bo Bichette card, I may look at prices for Fernando Tatis Jr., Vlad Guerrero Jr., and Luis Robert. I then ask myself: does it make sense that Bo Bichette is XX% higher / lower than [insert player]. Do I think Bo Bichette could one day perform like [insert player] which would result in prices increasing to that level?
6. Purchase your card(s)
Congratulations, you have made it all the way to Step 6, and you are ready to make a purchase. At this point in the process, you have set your budget, identified the player and card you want to buy, and know the current value of that card.
You have several options for where to purchase your target card(s):
- Local card shop (LCS): most local card stores have single cards for sale and may have the card you are looking for. To find a local shop, just search on Google for “trading card store” or “trading card store [insert city].” If you choose this option, you may want to ask for a specific player instead of a specific card of a specific player given inventory on-hand may be limited.
- eBay: eBay is the largest and most popular platform for trading cards. You will find a variety of all sorts of trading cards on eBay.
- Facebook: Several Facebook groups exist to buy, sell, and trade sports cards. You can sometimes find better deals on Facebook, but you also miss out on the security of buying through a platform such as eBay.
- COMC: Another popular platform, you will find a variety of trading cards for sale on COMC.
- Beckett Marketplace: Beckett has a small selection of trading cards for sale. You are typically better off using one of the other options listed above, but you may find a card you are looking for on Beckett’s marketplace.
7. Manage your sports card investment portfolio
The new sports card investor typically has two questions related to this step in the process:
A. What data should I track to manage my card portfolio?
The two most important data points to track are (1) the price you paid for the card and (2) the current value of the card. This will enable you to know whether you have made a positive return on your investment.
After you have sold the card, you would then want to track the sales price and calculate your return-on-investment (ROI). It is important that you include all taxes and fees in both your purchase price and sales price to accurately calculate your ROI.
B. How should I track the required data?
You can choose to either track your data manually or pay a monthly fee to purchase a subscription to software that will track the value of cards for you. If you choose to track manually, which is what I do, I recommend setting up a Microsoft Excel sheet to input the required data. If you choose to purchase a monthly subscription, I recommend looking at Sports Card Investor. I have not used their software, but they appear to be the leader in this space.
What are the best sports cards to invest in?
The truth is there is no simple answer to this question. Best is subjective and will be dependent on your sports card investing and collecting goals.
That said, the best sports cards to invest in will typically have several characteristics:
- Card type: Rookie Card
- Player: Current or Future Hall of Fame Potential
- Grade: Received a 9+ from a reputable sports card grading company
As I mentioned earlier in this article, I plan to write a more detailed post on analyses you can do to identify sports cards that may be undervalued. For now, I will only add that I like to compare card values for players at similar positions in similar sports. For example, I may look at Patrick Mahomes II card prices when deciding whether to invest in Justin Herbert cards. This helps me determine whether there is upside potential in Herbert’s card values.
Do you have advice about sports card investing for beginners?
Most of our advice is included throughout this post, but I will summarize a few of the most important points here.
- Remember that there are no guarantees when investing and be cautious of anyone who promises “easy money” or “guaranteed positive returns”
- Sports card values are very inflated following the CV-19 outbreak and 2020 Changed the Sports Card Market Forever. No one knows whether prices will remain inflated in 2021 and beyond.
- Be intentional about setting your budget and determining your approach to sports card investing. I personally focus on long-term bets and invest no more than 10% of my investments each year.
- Take the time to research players and cards you are interested in. Panini, Topps, Leaf, and others have ramped up sports card production in recent years and as a result, you will find 100+ rookie card variations and they are not all created equal. Read posts such as The Ultimate List of Ken Griffey Jr. Rookie Cards to understand your options before you buy.
- Have fun. I view sports card collecting / investing as a hobby first and business second. This isn’t the case for everyone, but I believe fun is the most important part.