Guns are an investment, right?

[45Broomhandle]

Hi huff. Nope! No compulsion here, unless you count trying to keep a wife of 50 years happy. She's happy with my system of keeping her (and/or kid heirs) informed. Make sense???? Am right now on Messenger with my eldest daughter up in Canada. Later....

Best regards from the Right Coast ~ ~ ~ 45Broomhandle

 

[The91Bravo]

M2 Carbine,

I'll give you $34 US DOLLARS for that 1911.. Thats a 200% increase.....

Do we have a deal??

 

[Kipling79]

Broomhandle.... 50 years of marriage? wow. Perhaps your system has value in more than just in the realm of documentation.

Congratualtions and kudos again. I am sure your heirs will appreciate your diligence... although any prospective gun buyers may rue the day they "tried" to decieve your heirs/heiress' into selling them under their true value.

 

[Dysfunctional Individual]

Unlike food and ammo, guns don't even seem to have kept up with inflation over the last few years. A Glock 19 cost about $480 in 2000 and costs the same today. On the other hand, an FN Five-seveN IOM went for around $800 in 2003, but goes for $1100+ today, mainly because it's been discontinued. There will be occasional cases like this, but they're hard to predict.

All bets are off if there's a regime change in the government. Unfortunately, we need seriously to start contemplating a Hillary Clinton presidency. In such a scenario, a grandfather clause will be your friend, but you also have to consider sale bans and even outright confiscation.

 

[Vermont]

I like to think of them as a hedge fund.

When things are at their worst, guns will be most valuable. When the supermarket is no longer there, or people can no longer afford to buy meat, everyone will want guns and ammo.

On the other hand, if my other investments work out, I can still use the guns for fun.

 

[glennfish]

IF you want investment value, stock up on about 100k rounds of high demand ammo, say 9mm or .223 My forecast is you can double your money in less than 3 years.

 

[Hokkmike]

I think the key is l-o-n-g term investment. Used, mine are almost up to what they cost new, And that was 10 years + ago.

 

[22-rimfire]

If you have a lot of disposable cash, I don't think purchasing select guns is a bad way to go. From my experience, about the best return you will get is that they hold their value relative to inflation.

With the big downturn in the stock market in the last week, it makes one wonder if stocks are just another form of gambling. Big losses this week. Most of which I can't afford. During the last big market downturn, it took me 5 years to get back to where I was. How many "5-years" do you have? This one really has hurt big time.

I do keep some guns as investment tools. They are there more because I like them. Yes, most have appreciated. But few have beat even a normal savings account in returns.

Liquidation? Some thoughts.... You can liquidate guns very slowly and do okay. That usually means you really don't need the money. If you try to sell off 10 or 15, I would expect about a 30% average hit (not 20%) and that is doing it carefully through the auctions. You'll take a much larger hit if you sell to a FFL dealer to liquidate. Guns can be sold fairly quickly (weeks), but it sure isn't like selling a stock or writing a check from an existing account.

Heirs are not the way to go. You spend a lifetime accumulating firearms that you attribute a lot of value to. You die and your heirs only see money. That really takes the fun out of it. It's often the same with land. If you share your hobby with family members, the first thing the young ones ask is "What's it worth?" It takes years to carefully groom heirs to appreciate firearms for the most part and then it's a toss up. So, my belief is to sell off most of your firearms when you are in your mid-60's. (Most can reasonably expect to live into their 60's.) At least you often know where they are going and feel some satisfaction that another collector will treat them and appreciate them the way you do. The cycle begins anew.

 

[lee n. field]

need to either invest it or treat myself. I'm considering picking up a number of guns - mainly those that are in danger of being grandfathered into new bans - an FAL, an AR-15, high-cap mags for my pistol...I have a good safe to protect them.

They're only investments if you can get money back out of them. If they're banned, how're you planning on selling them?

 

[jackstinson]

An "investment" would have been putting all my cash into Microsoft or eBay when they were a few bucks per share!
All of my guns are just fun purchases for me...toys. Just the same as; going on vacation, going to bars, buying more guitars, my jeep, and "all the other crap that people spend their extra cash on".
Personally, I get more "return on investment" by taking my wife on a nice vacation, than I would from any gun. I know it's sacrilege, but I'd rather spend $3k on my wife & family than a NightHawk.
Jack

 

[gunmn74]

A friend of mine (who has money and an FFL) invested in 60 ARs
before the ban and sold them all in one day at a gun show for a
40 percent return on his short investment.

 

[arflattop]

As an investment to hang your hat on in the future, firearms wouldn't be the vehicle of choice. If you have your IRA, 401K in place and a plan to pay off the house and car, then by all means, invest in firearms. I put all of my non retirement investment cash into my farm. It will keep or increase in value and at the same time I can enjoy it's ownership. I see my firearm collection in the same light. BTW, eight years ago I had to liquidate a large collection via auction (ex-Mrs. arflattop) and recouped full purchase price. I think the key is to purchase quality firearms (I'm talking Ruger, S&W, Sig, etc., not multi-$$ exotic shotguns) that us "normal" middle income people can buy. Free advice!!

 

[U.S.SFC_RET]

Guns may not be in the tops for investment catagory but a large percentage of them sure don't lose their value. Sure works to get past the wife.

 

[madcratebuilder]

If you bought the right guns forty years ago, that was an investment. I don't think any of the newer (90up) well increase like the older p&r smiths, 3 screw rugers and GI 1911's.

 

[14427H]

If you want to invest, keep it as it was made. That "was NIB" Remington Rand is nice, if it was still new in the box I'd say it would be worth $2500 or more.

There is that trade off...I am sure that Remington Rand has given $2500 in service as it is still can but top end investment guns might be postage stamps for all you would use them.

 

[Feanaro]

There are better investments, even among hobby goods. In 1959, the Red Book price for an 1875 gold dollar was $475 for a proof coin. That's $3200 in 2006 dollars. Today, it's worth $11,000 in PF-60 and a whoppin' $48,000 in PF-66.

 

[RPCVYemen]

BTW, eight years ago I had to liquidate a large collection via auction (ex-Mrs. arflattop) and recouped full purchase price.

Depending on how long you owned them, it sounds like you lost money - maybe that's your point. But if I buy a weapon, and sell it 5 years later for the purchase price, I haven't broken even - I have lost money. Assuming a 4% inflation rate, I need to sell the weapon for 20% more than I bought it to break even.

That's not even considering storage costs, and the opportunity cost of missing out in other investments. For example, if an index fund returned 6% per year, in five years,an investment in an index fund (with no storage cost) would have increased by 33%.

So if all I did was break even - sell the weapons for 20% more than I bought them for after 5 years - I would still be down 13% from what I would have gotten from an index fund.

Don't forget to factor inflation into an investment!

Mike

 

[Quigley]

Collecting vs Investing

Be careful! Call your habit what you want but remember if your not willing to sell it, it probably wasn't an investment.

Collecting
The gathering of things you like, it might be a brand, might be a type (shotgun/rifle), might be you just like to use a broad variety of them. The collector knows there is value in his or her collection but is not that concerned with the day to day value. A collector takes enjoyment in using the pieces they have aquired and probably would be willing to scratch a piece in exchange for using it in the field.

Investing
To invest in a firearm requires strong disipline, the true investor is one who educates themselves, knows what pieces are in demand and what they are worth not just today but what they were worth yesterday and speculates that they will continue the trends they have historically taken. A true investor takes possession of a piece from another and cares for that piece until a new investor is willing to pay more than they did to take over the care of that item.

 

[Soybomb]

can I justify my gun collecting hobby by the fact that my guns will lose very little value in most cases

If this is your criteria for something to be an investment, I would urge you to invest with the first bank of Soybomb. I'll hold your money and when you say I'll give you every penny back that you originally deposited

And now for my standard reply to this common question:
Just to give you something to think about if you tuck $1000 in an index fund today that averages a 10% annual return (which is relatively easy) you'll have something like $4400 in 15 years. I wouldn't gamble on a gun value increase of $3400 in those 15 years.

Guns are fun toys and they don't really depreciateas much as cars or electronics, but for the most part they are not investments. If you're sacrificing contributions to your retirement fund to buy garands, you've got problems.

 

[asknight]

At todays inflation rates, I'm not sure a 10% annual return would even keep up with inflation.


I'm gonna stick with precious metals.

 

[strat81]

The only benefit of guns as an "investment" is that they are physical, tangible property. Toasters are too.

In the event of a major economic meltdown where inflation is rampant, the dollar is worthless, and banks are closing left and right, money will have no value. "Stuff" will. Some folks hoard gold for this reason.

Assuming that a Great Depression disaster will not happen, and only minor recessions will occur, I'd consider Real Estate the best investment. They aren't making any more of it. Do your research and *invest*. Do not speculate! (See the real estate bubble that just popped as an example.)

Guns are better than other hobbies as far as resale value. Compare it to motorcycles, muscle cars, cameras, electronics and other "grown up" toys, and guns aren't a complete depreciation nightmare.

And, in the event of some type of disaster (economic or natural), a gun may certainly become more valuable since the necessity for one may increase.

If it was my money, I'd look into a quality rental property. If that was out of my range, I'd look at mutual funds - especially those with money in Latin America, Asia/Pacific, and developing countries. But, I'm in my mid-20s, so I can withstand some of the market bumps better than someone in their 50s.

Do NOT go out and buy 20 AR-15s as an investment. If you want 20 for fun, then by all means buy them. If you are part of the tin-foil hat brigade, gold coins might satisfy your paranoia. You should be able to find Krugerrands around.

Invest in your own education and training. Invest in your kids' education.

 

[cornman]

They could be, but I will tell you what is not at this time in history. Most mutual funds and most stocks are not. Just another product sold by salesman who also sell a bogus expertise. 99% of financial advisors do nothing but repeat a mantra that they have been told over and over again. Unless you have a financial advisor that has told you to go to a cash position he/she does not know his/her business.

 

[MilsurpShooter]

1884 Springfield Trapdoor, family heirloom, odd configuration, Buffington Rear site, probably worth a bit
Un-issued Yugo M48a, picked it up for $110
1936 Mosin 91/30 $65
K-31 in Walnut $120

While I don't necessarily see them as an investment, I try to keep in mind that I'll make money back if I turned around and sold them

 

[huntsman]

Seminole wrote:
Other than one or two guns that you might justify as defensive weapons, guns really fall more into the category of entertainment or a hobby. Investment for the purpose of wealth accumulation is something else. If you're spending money on guns that you should be investing for retirement, education, or wealth building, I would urge you not to do so. On the other hand, if you are spending money on guns that you would otherwise be spending on a Caribbean cruise, a trip to Europe, lying on the beach for a couple of weeks, going to the movies on a frequent basis, buying a new car every two years, or other such things, then go ahead--buy away and enjoy building your collection.

You mention you have some mutual funds, an IRA, and a savings account, but do you have a long-term financial plan? Do you have any debts? If so, why?! Do you invest in a systematic way? Do you own a home? Do you create a budget for yourself every month and stick to it? If your financial life is in good order, be sure that your monthly budget includes some "blow" money that you can spend some or all of on guns. There's nothing wrong with buying guns when you can afford it, but don't fall into the trap of thinking that gun expenditures are actually a financial investment. As someone else pointed out, the magic of compound interest, combined with the fact that the stock market has always made money over any ten-year period, makes that your best investment. If you are buying guns instead of investing wisely, you are cheating yourself out of hundreds of thousands of dollars over a long period of time.

I love guns, but my retirement and my children's financial future is more important than whether I buy myself another rifle.

This probably isn't the answer you wanted but its best advice you can get for free.

All I'll add is in this time of trouble Buy some silver coins maybe some freeze dried food and store some water. If your not be prepared to take care of yourself and family take care of that first.

 

[Mike OTDP]

Hmm....

You CAN invest in firearms, IF you know what you are doing and have a long timeframe in mind. That, and don't intend to shoot them. Keep your "shooters" and "sellers" separate.

I would not consider putting $$ into anything made after after 1945 as an investment. Too recent. Buy top-quality prewar firearms. Antiques are better yet.

MILSURP? Hard to judge. Frankly, I'd suggest snapping up a Cz-82 or two, as I think they will be like East German Makarovs, which doubled in price once the supply dried up. Don't even come near a Moisin-Nagant as an investment.

That being said, you are probably better off shoveling the money into index funds. They are more liquid, and require little to no expertise on the part of the investor.

As to ARs and AKs? Buy one or two for yourself if you want one, but don't think of them as an investment.