The Truth About Collectible Assets: Can Pokemon Beat the S&P 500?

[00:01] investment than the stock market? >> Areas like Pokémon right now are really interesting and compelling. Pokémon is up triple digits year-on-year in terms [music] of growth of collectors really driving enthusiasm. I'd rather own a

[00:15] a stock. >> Trading card sales are up nearly 30% in the last 5 years. >> Jordan Kobe dual logo man we bought last million. It's $17.2 million right now. It's done

[00:28] the S&P 500. >> 100 shares of Tesla [music] is not as interesting for me going up as one rare rookie card. [music] of Air Jordan 3 black cement in 2011, you could either be wearing them

[00:42] on stage or have earned 162% on your money, double the S&P and 20% more than Apple. >> [laughter] >> five of the most popular collectible assets to see how people are investing

[00:56] in them and more importantly how they've actually performed. The collectible asset classes consist of any number of physical items that people seek out [music] or artistic appeal.

[01:08] >> Over time a lot of these items have developed active resale markets where the value is driven by factors like rarity, condition, popularity, and buyer demand. So why are people investing in collectibles? Well, for one thing

[01:23] they're tangible, so you can actually hold them, display them, and show them off. And they often [music] have some kind of emotional or nostalgic value to those who buy them. Many people also see them as a hedge against inflation and

[01:36] headlines about Pokémon cards selling for millions can make collectible sound like a relatively easy way to make a lot of money. Let's look at some trending collectible assets and how each of these categories has actually performed.

[01:49] Pokémon cards. Spending on non-sports trading cards including Pokémon jumped 350% between 2020 and 2025. So, how have Pokémon cards performed as an

[02:02] investment? According to analytics firm CardLadder, Pokémon cards as a category of returned over 3,800% since 2004. That dwarfs the S&P 500's

[02:14] return over the same period. Vintage sets have consistently shown the strongest long-term appreciation. The original base set Charizard, for example, nearly doubled between 2023 and 2025 in near mint condition. So, are

[02:29] they a good investment? We'll get to that in just a bit. are buying pre-owned timepieces from high-end brands like Rolex and either

[02:43] holding them for long-term appreciation or flipping certain models on the secondary market. The pre-owned luxury market reached approximately $25 billion market reached approximately $25 billion in 2025, and platforms like Chrono24

[02:58] have made buying and selling far more accessible than it was a decade ago. So, how have luxury watches performed? The 5-year returns from 2019 to 2024 for the top three brands are impressive. We're talking 97% all the way up to 207%.

[03:17] However, in the last 2 years, we have not seen those same type of returns, and only the most sought-after timepieces from the top brands have consistently held their value. Fine wines and rare whiskey. Fine wine

[03:31] investors buy investment-grade bottles from France and store them in professional climate-controlled wine warehouses to maintain their condition. And platforms like Vinovest allow investors to purchase fractional shares

[03:44] and wine portfolios without actually having to store any bottles themselves. On the spirits side, rare Scotch single malts and American bourbons like Pappy Van Winkle are highly sought after by collectors. So, how have these performed

[03:59] as investments? The Liv-ex Fine Wine 1000 Index has delivered an average annual return of approximately 9 and 1/2% from 2005 to 2025. Rare whiskey has

[04:11] been even a stronger performer over the past decade with the Knight Frank Luxury past decade with the Knight Frank Luxury Investment Index recording a 288% increase in whiskey values over the past 10-year period ending in 2024. But, if

[04:24] you've seen the recent downward trend in alcohol consumption, I'd be a little nervous if I were banking on my collection of Pappy to fund my >> Julian. >> Fine art.

[04:38] auction houses like Christie's, Sotheby's, and Phillips, or directly from galleries. Platforms like Masterworks allows people to purchase fractional shares in high-value artworks, which lowers the barrier to

[04:52] entry. Fine art has delivered an average annual return of approximately 8.9% annual return of approximately 8.9% from 2000 to 2025. Collectors buy vintage and classic vehicles and either preserve them for

[05:08] flipped [music] the most desirable models. The classic car market has had a strong run through most of the 2010s and even into the early 2020s. Hagerty's Blue Chip Index, which [music] tracks 25 of the most sought-after post-war

[05:24] collector cars, outperformed the S&P 500 for nearly two consecutive decades. But, that changed in 2024 when 46% of the models they tracked fell in value. So, back to our initial question. Are

[05:38] collectibles a better investment than the stock market? Well, the historical average return of the S&P 500 is around [music] 10%. And as you've heard, some of these collectible assets have outperformed that over a certain period

[05:52] [music] of time. But it's not quite as simple as just looking at those returns. Collectibles begin to lose some of their appeal when we look at the risk and >> [music] >> illiquidity.

[06:05] Collectibles are not a liquid market. When you own shares of an S&P 500 index fund, you can sell them in seconds at market price. When you own a 1972 or a rare case of burgundy, you got to

[06:20] find a specific buyer who wants that exact item at the right time [music] at a price that you both agree upon. That process can take weeks, months, or even longer. And more often than not, the faster you need the money, the less

[06:33] you're going to make. Another big risk is subjectivity. The value of a earnings, cash flow, or any objective financial metric. It's determined [music] by what someone is willing to pay for it in a given day. And that is

[06:47] heavily influenced by trends, nostalgia, and celebrity attention. All of which and celebrity attention. All of which can shift with Beanie Babies. There was once a serious market for those. And now even

[07:03] Pinchers the lobster is only worth around $6.50. >> Another consideration, the carrying costs. This is the one that people forget about. Every collectible asset class comes with some kind of hidden

[07:17] costs. For example, Pokémon cards. They need professional grading to be worth serious money. PSA grading runs $25 to $300 per card,

[07:29] plus shipping and an annual membership. And once graded, they need climate-controlled storage. Luxury watches, they require specialized insurance and professional servicing every 5 to 10 years, which can run $500

[07:43] >> [music] >> per service. temperature-controlled storage. Fine art needs museum-quality climate control. [music] storage, maintenance, and sometimes costly restoration.

[07:58] >> Oh my god, I'm >> And then there's the transaction fees. Auction houses charge sellers 10 to 15% of the final sales price. And you have to add in the buyers premium, meaning

[08:13] they get you on both sides, which can add up to 28%. And the combined transaction cost between the buyer and seller can eat up 25 to 35% of the total >> I'm going to lie, I'm getting cooked. >> Even if you're just selling Pokémon

[08:27] cards on eBay, the seller fees on there are around 13%. So, even if you have a card worth 100 bucks, you're not getting 100 bucks for it. And many people don't [music] The IRS actually treats investment-grade

[08:42] collectibles differently from traditional financial assets. As part of the Taxpayer Relief Act of 1997, Congress actually lowered the top rate on most long-term capital gains, but deliberately

[08:56] left collectibles at the old 28% maximum rate. So, when you sell stocks or index funds that you've held for more than a year, your long-term capital gains tax year, your long-term capital gains tax rate is either 0%, 15, or 20% depending

[09:11] upon your income. But when you sell a collectible after holding it for more than a year, the gain is taxed at your ordinary income tax rate up to the maximum federal rate of 28%. When you add in state income taxes, a

[09:26] high-income collector could be looking at combined federal and state rate of almost 40% on a profitable sale. >> I'm getting cooked. >> Collectibles can outperform the S&P 500 at least in certain categories during

[09:41] certain periods for specific certain items. But there's an enormous difference between a market that can produce extraordinary returns and one that likely will produce them for you specifically. And when you take into

[09:55] account all of the hidden costs, it's likely your returns will be way lower than you're thinking. Compare that to a low-cost diversified index fund. It doesn't have a broker fee of 10 to 30%. It doesn't require climate-controlled

[10:09] storage. It isn't taxed at 28% [music] when you go to sell it. It's liquid, so you can sell it any day the market is open at a known price and in seconds. There's nothing wrong with collecting as a hobby, but collecting as a primary

[10:23] investment strategy is a different conversation entirely. If you ask millionaires, "How did you build your wealth?" very few are going to say it >> I still don't know the difference between a Pokémon and a Charizard.

[10:37] >> Actually, Charizard is a Pokémon. >> We would encourage you not to be the person spending money on Pokémon cards and Rolexes instead of building your emergency reserves, funding your Roth IRA, and buying your first home.

[10:51] >> If you do want to jump into these passion investments, this belongs in step eight of the financial order of operations after the foundation is already in place. If you want to see exactly how the financial order of

[11:04] operations works and how to build the kind of financial freedom that lets you eventually invest in the things you love, I want you to go check out this video right here. And as always, please keep building towards your great big

[11:17] keep building towards your great big beautiful tomorrow.