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Collectibles Investing – What Goes Up…

Last update on: Mar 15 2020

On a regular basis, there are reports of sharp price increases in nonconventional assets, such as art and collectibles. Unfortunately, those reports often mislead people into thinking the prices will only rise. The fact is, markets for these assets are very thin and subject to change on a whim. Consider this update on classic American cars. A few years ago they were a collectible rage, and most reports indicated that with Baby Boomers getting older and having significant wealth, prices for these classics could only rise. Turns out the opposite happens. For some reason, the Baby Boomers no longer are interested in buying the cars of their youth. To the extent they want to buy old cars, they’re looking at foreign and exotic cars.

Not so for ’50s cars from the old Big Three as well as now-defunct makers like Studebaker and Packard. The evidence comes in the March issue of Car & Driver, in an article by Rob Sass of Hagerty Insurance, which specializes in insurance for antique and vintage autos. According to Hagerty’s index of prices of ’50s American classics, Sass writes, activity peaked in August 2007 and hasn’t recovered. The decline affects everything from popular favorites like the Chevy Bel Air to rarities like the Packard Caribbean convertible.

In their prime, baby boomers were big buyers. But now, Sass writes, “their interest in the hobby is starting to wane.” Nor does he see the market rebounding any time soon. The millennial generation doesn’t have a comparable level of interest. “It’s questionable whether they will care about the cars of their grandfathers and great-grandfathers — or any cars,” he adds.



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