Trading Cards: An Emerging Asset Class in Diversified Investment Portfolios
Investors are increasingly diversifying their portfolios with trading cards, alongside traditional assets like stocks, ETFs, and real estate. In 2024, Gemrate reported a 16% surge in trading card grading by major authenticators, reaching over 20 million cards.
According to Ryan Hoge, President of PSA, a leading trading card grader, the sector has significantly grown during the pandemic and is now a significant liquid asset for many investors. PSA authenticates and grades cards based on their condition and rarity, providing collectors and investors with reliable valuations.
Hoge emphasizes the role of graded cards in liquidity: "The higher the grade, the rarer the card and typically the more valuable. This makes it easier to transact these cards on platforms like eBay."
The trading card market has expanded rapidly, leading to an increase in buying and selling services. PSA offers a vault for card storage and is integrated with eBay to facilitate seamless sales. This integration allows investors to "time the market" by listing and selling cards promptly.
Options such as these have made trading cards an attractive asset for investors who may not be avid collectors. Hoge advises investors to focus on rookie players, especially in the NBA, given the impending transfer of the trading card license to Fanatics.
By incorporating trading cards into their portfolios, investors can potentially diversify their risk and benefit from the growing demand for these collectibles.