How to invest in Toys and Collectibles

Are toys an investment?

Toy collecting is a niche hobby, which has blossomed into something more. Partly thanks to the nerd conventions that allow pop culture fans to express themselves, and allow retailers to bring new and exciting products to your attention. 

Awareness of the toy collecting hobby is supported by movie franchises that continue to reach new generations of fans and followers. Comic conventions will bring larger crowds and merchandise related to shows and characters that we love and cherish as fans. Further, online media has help to expand access and exposure of shows more people to enjoy watching stories about new heroes and villains. Developing loyalty through media will help attract new fans, and keep collectors wanting more.

In the 80s companies created toy lines which were heavily supported by tv series and movies for children. These toy lines included He-man, Gi Joe, Transformers, Teenage Mutant Ninja Turtles and even Care Bears for example. This established a marketing system that endorsed a toy range and also grabbed the attention of children's imaginations. Having the hottest action figure was every kid's dream but not always available to buy. Those kids who did get their hands on a hot new toy would not have considered keeping that figure in the box or clean.  

Twenty years later in 2007, a collection of 275 Transformer G1 items including 101 Autobots, 81 Decepticons, and 92 other licensed products sold for 1 million dollars. This sale made news headlines and was just the tip of the iceberg in terms of toy collecting and investing.

Teenage Mutant Ninja Turtles is a series, similar to Transformers, that has seen multiple tv series, movies and multiple generations of toys released for 30 years or more now. The original TMNT figures were $10 each in the mid 1990s, and if you were to chase these figures today would cost $75-$100 each. A Krang Android action figure would set you back $200+, being a larger and rarer figure. Although not in the millions, the increase in value is real and shows that toys can gain value over time. Also, keep in mind that there is an apparent generational leap of about 25 years from when a toy becomes a collectible. 

Not all action figures are made equal nor worth the same over time. But how do you know what toy is a gem or junk? In this difficult question lies the risk of buying any collectible as an investment. Another way of looking at investing in toys, is to think if you had bought Transformer G1 items in 1980 for $100 each, you could have saved a million dollars trying to chase these old and rare toys. Toys are mass produced products. However, despite being mass produced, sometimes good condition will add to a rarity of an item. Secondly, being a collectible not a "toy", you could be surprised if someone kept a toy from the past and original packaging in pristine condition. 

Many He-man collectors scour the globe for rare,  unopened and complete toy sets.  And the origins of this collectible comes back to a hit tv series from the 80s which supported the toy line and grabbed a generation.

In contrast some toy lines are rare because they actually have limited runs. A good example is the Spider-man, who also has multiple tv series, movies toys and games spanning decades. However, the toys that hold value are limited edition products, such as those by Hot Toys in sixth scale. Hot Toys, Sideshow and other brands have developed collectibles on limited supply, quality and premium products. Like a louis Vuitton of toys, there are toys which are not you average, and these hold value better over time.

In choosing what to invest in as a collectible, a starting point is to look at what shows or movies have broad acceptance by the current generation. And in 25 years when this group becomes adults, with jobs and kids, what childhood memories would they want to share or dig up from the past? Will Bluey or Fortnite be a hot stock in 25 years from now in 2045? Would someone want to buy a playset from 2020 and willing to put large money for a mint or complete set?

Which is a good lead into my final tip. Collectibles can have a popularity expiration date. One day stores might no longer sell or stock star wars or fortnite toys. Harrison Ford will be gone and his image as han solo considered a dinosaur. Kids might not be interested in Fortnite and move onto the next big game. But those that remember are fans and collectors who want to keep the fond memories and series alive in their own way. Investing in toys can be for the fun of having memories about a show or character you love. Whether the toy becomes valuable depends on whether you are willing to part with the item and if someone is willing to pay for it.

We do not recommend taking toys out of the box. You may have heard this on SNL as a nerd joke, but it holds true. Open it and it's not mint and might not reach full resale value.

Lastly, this is not financial advice. Opinions are not obligatory as reasons to spend or invest money in toys.