Sports Card Investing: Ultimate Guide To Maximize Returns

Sports cards continue to make international news. For example, the 2018 NBA Logoman Luka Doncic rookie card recently sold for 4.6 million dollars. Also, consider a 1989 Ken Griffey Jr. Upper Deck rookie card. In July of 2017, the value was $400. The same card recently sold for $3,725 (both being PSA 10 grades/PSACards).

UPDATE 2023: The epic sports card boom has ended, as the rookie cards we buy have stopped going up by more than 100% annually. But that 5-year run not only paid of in terms of dollars, but millions of new collectors joined the hobby. Sports card investing is better than ever, even if returns are not ridiculously high anymore (side note: we still feel the next few years will be good for sports cards).

It’s little wonder they’re seen as ideal investment pieces, especially as the market has been on an upswing over the past five years, particularly during the COVID pandemic.

So many sharps are adding sports cards as alternative investments to the stock market, gold, and real estate.

IMPORTANT: In essence, there are three main aspects to consider when allocating your sports card portfolio: time horizon, risk tolerance, and diversification.

For some, sports cards are a kid’s hobby with little value in the real world. But sports card sharps know the truth in regards to the enormous returns certain sports cards can provide.

For them, it’s about maximizing profit, so a diversified, data-driven allocation approach should see the best returns in the long run.

Here is everything you could need to know about sports card investing, specifically focusing on creating card investing allocation models to maximize returns.

One last item, in MOST cases, we do not recommend purchasing raw cards (i.e., non-graded cards) for your investment portfolio as the risk is too significant. Too often, they grade poorly.

Email us at info@goldcardauctions.com if you want to know why we stated MOST cases.

 

Sports Card Portfolio Allocation

Below are the three main aspects you must follow when creating a sports card portfolio that will maximize returns.

 

Time Horizon

Younger investors can allocate more risk to their sports card investment portfolio vs. older ones.

For example, a 26-year-old can afford more risk in their portfolio when compared to a 68-year-old investor.

 

Risk Tolerance

This comes down to knowing yourself. If you can’t stand to lose and react poorly, lower-risk cards are a better option.

If, by nature, your more calm and easy going you may want to allocate more risk.

 

Diversification

Put, diversification is the act of varying your range of investments to avoid potential pitfalls.

Rather than dumping all of your money into one specific player or card, you’ll be spreading it across a number of different markets within the hobby.

You have 3 classes of diversification. One, Hall of Famers/Hall of Famers active players. Two, Hall of Fame Trending. Three, top-ranked rookies and prospects.

HoF/HoF Active: Low Risk | Moderately High Returns – Examples: Babe Ruth, Wayne Gretzky, Mike Trout – Generally, hold up well in times of economic downturns.

HoF Trending: Moderate Risk | High Returns – Examples: Luka Doncic, Ronald Acuna Jr., Sidney Crosby – Generally, they don’t hold up as well in times of economic downturns.

Rookies/Prospects: High Risk | Ultra High Returns – Examples: Wander Franco, Trevor Lawrence, Jasson Dominguez – Generally incur heavy losses during economic downturns.

PLEASE NOTE: Generally speaking, you should invest only in graded cards. We recommend PSA 10, PSA 9, BGS 9.5, SGC 10, or HGA 10. We lean heavily towards PSA 10 as they provide the best ROI moving forward. One exception regarding our investment-grade recommendations is rare, older, high-value sports cards. For example, a Ty Cobb Red Back with a PSA 5 grade or a 1979 Wayne Gretzky O-Pee-Chee rookie card PSA 7 grade would be suitable investments.

If you have questions about what grades are acceptable for what cards, email us at advice@goldcardauctions.com, and we will assist. Also, for this guide, we have left out BGS 10 Black Labels as they are rare and difficult to compare regarding ROI.

 

Optimal Sports Card Portfolio Allocation

Here we bring it all together to create our sports card investing portfolio.

Remember, if you’re younger, consider more risk while older investors trend toward less risk.

Ultra Conservative:  90% HoF/HoF Active | 10% HoF Potential | 0% Rookies/Prospects

Conservative:  70% – 20% – 10%

Moderate:  60% – 30% – 10%

Agreesive:  60% – 20% – 20%

Ultra Agressive:  50% – 25% – 25%

Current Gold Card Auctions Allocation Model In Use:  60% – 20% – 20%  (of course, this is our allocation, and you’ll be able to mix and match accordingly based on your tastes, as well as your budget.

It can be tempting to stack your portfolio with one specific player.

As noted above, RCs featuring the likes of Michael Jordan and Ken Griffey Jr. have risen rapidly in price over the past few years, and anyone who held onto a copy (or five) is likely to have seen a significant profit.

So, why not invest in a card like that as often as possible?

HOF/HoF Active players don’t go up as much during economic upticks but don’t decrease as much during economic downturns.

While rookie cards and prospects may skyrocket in value during economic upticks but may crash in value during economic downturns.

An HoF Trending card is somewhere between the two.

Pro-Tip: Diversification will help to lower the overall risk during bad times and maximize gains during good times. It is a huge benefit if your main objective is to maximize your sports card investing portfolio ROI.

You’ll have to find the right formula for your appetite and the players you’ve chosen to invest.

Number of cards in your Sports Card Portfolio? At a minimum, at least have ten and max out no higher than 100.

Below is an example of an ideal sports card investing portfolio using a 60%/20%/20% method with 10 cards.

• 60% – 1979 Wayne Gretzky Topps/OPC, 1933 Babe Ruth Goudey, 1996 Kobe Bryant Topps Chrome, 2000 Tom Brady Bowman Chrome, 1989 Ken Griffey Jr. Upper Deck, Ty Cobb T206 
• 20% – 2018 Luka Doncic Prizm, Ronald Acuna Bowman Chrome 
• 20% – 2019 Wander Franco Bowman Chrome, 2020 LaMelo Ball Prizm

The above portfolio contains ten cards in total, six of which are HoF/HoF Trending (60%), two are HoF Trending (20%), and two are Rookie/Prospects (20%).

If you want a total of 20 cards in your ideal portfolio shown above then you would have 12 HoF/HoF Active (60%), 6 HoF Trending (20%), and 6 Rookie/Prospects (20%).

 

Sports Card Grading

Whether it be PSA, SGC, BGS, or a new up-and-comer, grading is essential when looking at sports cards. Higher grades result in a higher ROI. One brand has more value than another.

As such, we would strongly recommend looking at high-grade options whenever possible since they tend to make the best investment pieces. 

Also, PSA is the most valuable and will have a great ROI, followed by BGS and SGC. PSA 10 is equalizing to a BGS 9.5, which is equivalent to an SGC 10.

Pro-Tip: Remember this when investing PSA 10 > BGS 9.5 > SGC 10

We (Gold Card Auctions) prefer PSA 10 in most cases if available but will also consider BGS 9.5 and SGC 10 in certain cases.

For a more detailed overview of grading, you can check out our in-depth guide; PSA Grading vs. Beckett Grading vs. SGC Grading.

 

When to Buy and Sell

Buy low, sell high.

It’s standard advice for anyone hoping to profit in any market, and it can be that easy in practice.

Knowing exactly when to buy and sell cards is a separate matter; it only comes with experience, practice, and knowledge.

• Short-Term Investments: Popularity among the masses allows for a quick flip as you sell cards about a specific event. Examples include; injury bounce-back, new coach, trade to a new team, a prolonged slump that is not sustainable, injury plague – now healthy. Bottom Line: Risk Heavy, Not Suitable For Beginners/Long-Term Gains.
• Mid-term Investments: These could take a year or so to come to fruition. Still a good deal of risk. Examples: Investing in the league’s MVP/RoY favorite before the season begins. Risk Heavy, Not Suitable For Beginners/Long-Term Gains
• Long-Term Investments: The long-term investment is what we recommend and use. Ideal for the average investor. Hold these sports card investments for ten to twenty years or longer.

More experienced, veteran sports card investors can attempt short and mid-term investments as a smaller part of their purchases.

If you have questions in regards to any of the information above email us at info@goldcardauctions.com.

 

Where to Sell Sports Cards

Where to sell is another crucial aspect to consider. 

Online auction sites like eBay are always popular, and you can always go to a trade fair or collectors event. 

For more information, check out; Where/When to Sell Your Sports Cards (Best Card Sellers Guide).

Sunday, Tuesday, and Thursday nights at 9 pm CT tend to be favored when looking to maximize the audience size and obtain the greatest sale amount.

 

Sports Cards Portfolio Tracking

If done correctly, tracking your sports card investments will take little time and effort. 

We’d recommend jotting down the following information if you’re keeping tabs on your ROI in regards to your sports cards investments:

• Purchase date – day, month, year of purchase dd/mm/yyyy format
• Card info – Player name, card number, parallel, auto
• Purchase price – how much was paid, including the shipping cost
• Sell price – how much the card sold for (include shipping cost and any auction fees)
• ROI – The return on investment (plus or minus)

A program like Excel will do the job, while there’s nothing wrong with a good old-fashioned pen and paper.

Whatever method you choose, be consistent and honest regarding the data you collect. 

Conclusion 

It’s tempting to look at the hottest cards right now when looking for potential investment pieces. 

After all, if they’re turning a profit today, they’re likely to do so in the future. 

But that has been proven not to be the best strategy to maximize your sports card investing ROI.

Follow our long-term investment advice to obtain maximum returns.

If you have any questions about purchasing cards for your portfolio, allocation, or anything else discussed in this write up please email info@goldcardauctions.com.