What Are the Benefits of Investing in Rare Collectibles?

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There’s always something alluring about collectables that many in Australia seek out, either for sheer pleasure or as a purely financial instrument. Whether it’s a fine art piece by a prominent artist or a pokemon booster box, collectables offer Australians a chance to diversify their portfolios and, on a more rare occasion, mix their passions with business. And there are hundreds of avenues that aspiring collectors can look into, from rare models of cards to even antique items as long as they’re bound to appreciate in market value over the years. 

However, before jumping into the possible benefits of owning collectables, there are a few things that people should keep in mind first: 

  • When considering collectables, passion is the key here. Don’t do it expecting to sell the item at a higher markup down the road, but rather, do it because that’s what piques your interest. People who love art collect art prices for their pleasure, irrespective of money-making. The same goes for those who collect older car models or antique pieces of jewellery and ornaments. In many cases, collectors do it because it’s what they like, and the investments are just an added perk that comes with it. 
  • Take care not to let these collector pieces eat into the portfolio and, in any case, must be used to diversify and mitigate any financial risks instead. Top investors recommend not putting more than 5-10 per cent of the portfolio into rare collectables and other such art pieces. And when in doubt, always seek out professional experts or financial planners to help with the monetary aspects of owning collectables. 
  • Since most collectables aren’t being traded on the public market, there’s an added risk to the investment. These rare art pieces or items are sold off at private auctions or other functions. This means that there is no sizeable financial authority in Australia that can likely help the investors in risk management or price control in the market. 

There’s also the issue of taking care of these collectables to keep them in pristine conditions in the long run. It’s the only way to appreciate them, so think before buying collectables like a pokemon booster box if no one will put the time and effort into caring for them.

Benefits of Owning Rare Collectibles in Australia

As is the case for any financial instrument, collectables come with several economic advantages that many investors and collectors can exploit. So, take a look at what they are below:

  • They are an excellent way to diversify the total portfolio and spread the risk involved in stocks or owning assets and rare art pieces. However, do not invest more than what can be handled into collectables and valuable items. Always calculate the risks and plan with the finances accordingly. 
  • Investors in Australia can make use of collectables as a tax write off. Collectors can use such rare pieces to avoid any capital gains even when the item appreciates in total market value over the years. Investors can donate heavily to the collectable asset or hand down their already existing collectables to their heirs. These are two of several ways that collectors can get a tax writeoff from the Australian government. 
  • Collectables offer investors a rare chance to pursue what they love and still use it as a critical financial instrument to boost profits. Although there is a significant risk in the investment part, investors can still indulge in their passions and curiosity without focusing on the monetary gains.

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