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The Top-Performing Alternative Investments: Vintage Toys

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Toy speculators face a fickle market, but the high returns are not make-belief.

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Vintage toys may seem like clutter to some, but one man's trash is another man's treasure.

How It Works: While there are sure to be fanatics scouring the Internet ranks and local thrift stores looking for deals, this niche is made up primarily of the toys' original owners. Be it hoarding behavior, sentimental value or a clear-cut investment strategy, toys of yore are still out there, accruing dust and value, among other things.

Who's Investing and Why They're So Good at It:
Much of the investment success of toys can be attributed to the baby boomers. Being the first generation brought up watching television, the demand exists for collectibles dating back to their old favorites, as well as their children's. Barbie, GI Joe, Mickey Mouse, My Little Pony, etc. have all seen significant increases in value since their heyday.

The most successful collectors are able to resist the urge to rip right through the packaging the moment they get it. In some cases, a product out of its packaging, though still in mint condition, is worth half of what it would be if it were still boxed up.

What They're Making: The longer certain items are held onto, the more they'll bring in. Most collectors of pop culture toys recommend holding onto the items for at least one generation. With that in mind, now would be a great time for Star Wars enthusiasts to start eying the market. According to a report on BeatThatQuote.com, a rare 12-inch Boba Fett figure issued in 1979 was worth as much as $875 in 2005. The day this story was published, a collector on eBay was asking $46,000 for an original poster advertising the 1980 movie The Empire Strikes Back.

One toy speculator writing on Untemplater this year discovered the value of a mint condition, boxed GI Joe action figure bought in 1985 was up from $2.99 to $600, an increase of more than 20,000%.

Why They Really Do It: Toy investors may hang onto their treasures for so long out of sentimental value. Yet, the most successful among them won't have too many memories of tossing their figurines around the den. As mentioned above, the maximum value is given to products still in their original packaging. What's more likely is that their intentions all along were to hold onto their prizes, suffering through years of childish anticipation, all because a wise elder once told them, "Don't open it, it could be worth a fortune some day."

How to Get Started: Starting out in the toy-hoarding business is as easy as getting to your local store and buying some toys. While conventional wisdom points to stashing the hottest toys of today, it doesn't always work out that way. According to Justin Moen, editor of Toys & Prices 2010, "There are times when today's treasures become tomorrow's junk. Conversely, there may be toys that no one really cares about now that may be treasured in the future. It's all about paying attention to the hobby and asking questions." Keeping up with trends on the Internet and popular culture in general can help you gauge which toys can stand the test of time.

According to a report from The Guardian, "…the collectors' market is fickle, and something that seemed worthless a few decades ago may now be in real demand. Even the experts say it is difficult to predict which modern toys will fetch the best prices in a few decades' time."

Once you've got your toys, the most important thing is storage. Not only does the toy need to remain in the packaging, but the packaging itself needs to be unbent and pristine. Keeping toys encased in bubble wrap or stored in a bin where they won't be moved around too much could be enough to keep your investments protected.

Amateurs Be Warned: If you're short on patience and not into clutter, be wary of getting involved in this alternative investment. Premature selling is right at your fingertips with the likes of eBay (EBAY), Amazon (AMZN) and the Internet in general. But time and care is the key to unlocking the profit potential of your most childish possessions.
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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