[Part 1 of 3] The collectible card game that quietly outperforms stocks and real estate
Part 1: Investing in trading cards is a thing
A BGS 9.5 Alpha Black Lotus from Magic: The Gathering sold earlier this year for a whopping $166,100.
With that kind of money, you could buy an Andy Warhol or some rental property to diversify your investment portfolio. But times are changing; new opportunities are maturing. Fine art and real estate are extremely expensive to maintain, and have only moderate gains compared to the Black Lotus (more on that later).
Which begs the question: Isn’t it about time we start taking collectibles like Magic cards more seriously as a viable investment vehicle?
If you’re not familiar with Magic, it’s a trading card game where players use their cards to cast spells on their opponents. In order to build more powerful card decks, players need to buy more and more cards -- which they get either from blind booster packs, or on the secondary market.
Risk and trading are built right into the game, so it’s no surprise that many Magic players also enjoy investing. That’s one of the reasons why, even though there are tons of super cool collectibles out there, Mythic Markets is launching with assets that Magic fans will love.
But you don’t have to be a fan to appreciate the investment potential in Magic cards. Assuming the rest of your finances are in order, Magic cards can be a legitimate and profitable way to diversify your portfolio. In fact, their performance can be comparable to (or even exceed) more traditional investments like gold and real estate.
Over the last 10 years, the MTG Power Nine (the nine most powerful cards in the game) have outperformed the S&P 500, U.S. real estate, gold, and other tangible assets.
The numbers speak for themselves. Over the last 10 years:
U.S. real estate gained 27%
Gold gained 34% (after peaking and taking a nosedive in 2011)
S&P 500 gained 75%
Luxury investments generally did a bit better:
Art gained 64%
Jewelry gained 125%
Wine gained 147%
Coins gained 182%
Cars gained 289%
That’s not to say all Magic cards do that well, of course. Certainly you have to be choosy about your investments, like in any asset class. We’re specifically looking at blue-chip, investment-grade cards which meet certain criteria for condition, rarity, historical performance, and significance.
Be sure to check out Part 2 of this series, where we talk about why MTG investments are particularly intriguing.