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How to Beat the Market With Collectibles

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Fed Chair Janet Yellen is giving the world commitment issues.

The Federal Open Market Committee meeting will have investors around the globe anxiously awaiting 2 p.m. EDT on September 17 when the Fed will announce the fate of interest rates.

You can’t trust the other Fed members, who have been feeding Wall Street a steady stream of yes, no and maybe over the past few weeks in regard to interest rates.

And in the meantime, the S&P 500 Index is down more than 7% from its 2015 highs and 4% since the start of the year — not exactly the kind of strength stocks have enjoyed over the past several years or encouraging when most investors have traded fixed income for stocks in our near-zero interest rate environment.

Regardless of what Yellen announces, the uncertainty in the market isn’t going to disappear. But you don’t have to keep your money trapped in the market if you’re looking for a solid return on your investment. In fact, certain collectibles markets are outside the Fed’s influence and can yield your portfolio a solid gain…

Collectibles are an excellent way to diversify your assets since these items tend to be held in strong hands who aren’t prone to sell simply because the market has become volatile.

Today, I am talking with Mike Storeim, president of Classic Posters. Mike has been involved with classic music art posters since the early 1980s and served as the consultant for the creation of the third-party grading by Certified Guaranty Company, part of the Certified Collectibles Group. In addition, Mike is a consultant for several museums, is routinely called upon by dealers and collectors for authentication advice and is currently working on a new book entitled The 100 Greatest Psychedelic Rock Posters.

Jocelynn: I’ll admit that I’ve heard of collecting coins and stamps as a way of diversifying your wealth, but I was unaware that music poster art was gaining ground as a collectibles market. So, my first question is why collect?

Mike: For many of us, the bands advertised on these posters and handbills were what we grew up listening to so we automatically have a connection to the music and the art. Art critics, museum curators and gallery owners have compared the posters created by Wes Wilson, Alton Kelley, Stanley Mouse, Rick Griffin and Victor Moscoso, among others, to the Belle Époque period posters of Toulouse-Lautrec that have enjoyed outstanding popularity with art collectors worldwide.

Like the posters of the Belle Époque, the psychedelic rock posters of the ‘60s and ‘70s are classic. They can be enjoyed individually, or investment-grade collections can be built around them. In recent years, these pieces of art have been displayed at the Denver Art Museum, the Laguna Art Museum, the de Young Museum, the Museum of Modern Art, the Rock and Roll Hall of Fame, Denver University and many others.

Jocelynn: How do you suggest a new collector start?

Mike: I always suggest that new buyers look first at what appeals to them personally. If they were Grateful Dead fans, then perhaps concentrating in that area would be best. If they are drawn to a certain artist, Rick Griffin for instance, then work on obtaining pieces by him.

A great resource for new collectors is my website, ClassicPosters.com, as it lists many of the available posters.

Another reference is a book titled The Art of Rock by Paul Grushkin. It is out of print but can be found at various booksellers such as Amazon. You just have to be careful not to purchase the paperback, as it is too small. You want the seven-pound hardbound version.

Jocelynn: Why do you think this is a growing market?

Mike: There is a very limited quantity of this material. It was printed in relatively small quantities (50-5,000 pieces) nearly 45 to 50 years ago. It was intended to be throwaway advertising and was handed out at ticket outlets and the shows themselves. It quickly became something that people saved, but much of it had been damaged. High-grade examples of most of the pieces from 1966 through 1971 are scarce to very rare. In some cases, only a few of a particular piece may even exist.

Potential buyers must be aware that many of these posters were reprinted within months or years of the concerts. Only original, first-print posters and handbills are suitable for investment purposes, while the reprints can be framed with less financial risk.

The advent of third-party grading, the growing popularity with museums, plenty of baby boomers with disposable income and the growing awareness of what an important art form this is have all led to an unprecedented demand that is growing.

Jocelynn: With demand growing in the face of very limited supply, what should investors be wary of?

Mike: The single biggest thing to avoid would be a reprint that is sold as original. In many cases, the original can be worth 10 times more.

Second would be either overly optimistic grading by the dealer, or the nondisclosure of restoration or other damage. Restoration is fine if disclosed and is accepted in the industry. It does, however, lower the value substantially and I would generally shy away from restored posters for investment reasons.

Third would certainly be the price. There is no published guide to pricing at this time, but with the advent of certification, this will happen as auction results and website pricing data accumulates.

Last is the problem of bootlegs, or fakes. This is a problem in most fields, but as these vintage posters have become more popular and risen in value, the problem has grown along with it. These fakes are generally easy to spot if you are familiar with the real deal and the process they were printed with, but they are definitely good enough to fool the casual eye and even the less educated dealers.

Jocelynn: Thanks for the great information, Mike.

Classic Posters was originally named Fillmore Posters until Live Nation, the owner of the Fillmore Auditorium, received a trademark for the name. The original company was started in 2005 and the auction division was added in 2008. It averages four auctions per year, with the occasional addition of a fifth. Besides the auctions, Classic Posters has a website that features thousands of vintage items in all price ranges. Classic Posters consults with the largest collectors and investors in the world, helping to create meaningful collections.

Mike Storeim was recently featured as part of our new Private Assets Report service, explaining in detail how to collect music poster art, the background on this unique niche and how best to protect your investment.

Establish Your Quiet Wealth

Yellen & Co. are stuck in a nasty quagmire in regard to interest rates. Raising them too high too fast could crush the economy with a too-strong dollar, not to mention make it impossible for the government to pay interest on the mounds of debt that it has accumulated.

One key way to protect your wealth is to diversify some of your holdings out of the market and into “quiet wealth” in the form of collectibles such as stamps, coins, rare art, etc. Not only is it protected from wild swings in the market, but it’s much harder for the government or anyone else to assess your wealth.


Jocelynn Smith
Sr. Managing Editor, Sovereign Investor Daily

The post How to Beat the Market With Collectibles appeared first on The Sovereign Investor.

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