Guns as investments

[Victor1Echo]

Over the past five years I have noticed the price of guns go up quite a bit. I kick myself when I think of how many guns I could have bought at what prices. I am done giving investment bankers my money to squander. I do not want to save money. What I was thinking was trying to purchase a quality firearm a month as an investment. Let's say an average of $500 a month or maybe 9-10 guns a year. I would buy guns that I wanted, and ones that I felt would be popular/classic. Another thing I would do is find a way to claim it as an investment on my taxes That's another bucket of bullets.
Questions

Who can tell me what the prices on firearms were thirty years ago? Twenty? Maybe provide an example?
Anyone have a story about how they bought a new rifle for $80, then sold it later for $1000. Or something like that?
Please bear in mind that I didn't get to frow up with any grandpas to share this knowledge with me.

Thanks

 

[stubbicatt]

There are better investments than firearms, but few that are as rewarding.

There are several niche markets in firearms collecting. There is so much to learn. My suggestion is to start reading up on it. Here is a good starting point.

 

[GeezerwithGuns]

"Investment" only works if you're planning to sell them. I don't sell, I buy.

 

[ganymede]

well i'm too young to have first hand experience in this. but think of this. A machine gun bought in 1985 for $500 now sells for well north of $15,000. from an investment standpoint it might be a really good idea to buy as many guns as possable that may be banned. AR-15's AK-47, and Siaga shotguns will go up in value exponatialy about 15 years into a ban. Keep said investment firearm NIB (new in box) and don't fire them. At the very least the firearm's value will keep up with inflation and you wont lose any money. Say they enact a ban soon and the army adopts the scar as thier official service rifle. only about 10,000 SCARs in circultion. demand would be huge and with such a small supply, and few people willing to sell them, i could see those selling in the 15,000 dollar range very easily. there are 150,000 registed machine guns and those sell for that price, and sometimes much more.

 

[emerson]

I think you'll realize the greatest capital appreciation by investing in a well diversified portfolio over a long time-horizon.

I do not want to save money.

You can thank those who do for providing for your retirement when you get there.

 

[franconialocal]

I had the same discussion with my father. Any time money has been tight he has said "then why don't you sell one of your toys". I explain to him that, to me, they are an investment for reasons stated in above posts. I read a study somewhere (I'll try to find it) that reflected a STEADY %5.00 increase per year on value. I find this to be somewhat true.

I bought a Bushmaster ORC pre-Obama scare for $880.00 and with the current market and upgrades that I have done I feel confident I could sell it now for upwards of $1300-$1500.

Have you seen a show like "Pawn Stars"? These guys are always getting some very interesting old firearms (blunderbuss, 1800's era Colts, old Winchester rifles, etc.) and I am always suprised by how much they are worth. If your intent is to keep them original box/papers without ever firing them, then I feel confident that you can feel safe with them as a solid investment, but it may take years upon years for the value to mature.

My grandfather had a WWII era navy dress sword (officers) that he ended up selling before he passed away in 1992 for about $2,000, great condition, original finish.

Just my .02 cents.....

 

[emerson]

it might be a really good idea to buy as many guns as possible that may be banned.

That is really the issue - speculation. The astronomical increase in the price of those weapons is due to government regulation, not because of any normal market factor. You'll have to make an educated guess and bear a lot of risk if you follow this investment strategy.

In addition to regulations over firearms themselves, you'll have to consider the price of substitute goods and even the ammunition to fire the darn things. You may want to buy hundreds of thousands of rounds of ammunition to go with your firearms, and then hope that the government doesn't ban lead based ammunition outright.

I would be interested in a time-series which shows how the price of various grades of firearms tracks against inflation and the general cost of living over say the past 80 years. I have an idea of what it would show, but I'm not going to ... speculate.


You might as well play in the forex markets... or buy collectible plates.




(Victor/ganymede - this isn't directed at either of you personally.)

 

[taliv]

there are LOTS of problems with guns as investments

1. you can only invest as much as you can store
2. theft
3. rust
4. possibility of a 'turn them all in' style ban makes them worth $0
5. gun companies are producing more and more (increased supply lowers value)
6. liability as far as compliance with gun laws
7. 20-30+ yr old ones are not terribly liquid
the list goes on

 

[searcher451]

No question that guns are always going up in value; the better question is whether you'll live long enough to reap any rewards ... and whether you'll actually be able to part with a cherished member of the family, as our guns often become, when the time comes. The 800 pound gorilla in the room, beyond all of that, is the future legality of guns in our society. Who knows what laws will be enacted down the road, and for what reason, and how that might affect your ability to sell a given item, or even a single item?

If you are looking for sure-bet long-range investments, gold and silver are better than guns; heck, given the last 50 years, so is the U.S. stock market.

 

[ganymede]

4. possibility of a 'turn them all in' style ban makes them worth $0

I find this to be highly unlikely to happen in the NEAR future. So far in our nations history there has been no "turn them in" type of ban. in other countries where such a turn in has occured, the government has at least payed the owners whtever they thought the guns were worth. Obama can't even get health care reform passed, what do you think would happen if someone tried to pass a confiscation bill? anyway if it comes to a turn in, well, in acordance with THR's wishes, ill keep my plan to myself here.

 

[Harvey]

Bought a MILSURP 1911A1 and an M1A Carbine in '45 for $14.25 a piece, $17.00 each delivered USPS. I think now the cardboard boxes they came in are worth more than the guns.

But today, guns as an investment? Nah.

 

[wally]

4. possibility of a 'turn them all in' style ban makes them worth $0

Bullets first! Then its cold dead fingers time, we'll see who'll stand up to restore the Constitution.

Next time the pols start talking gun control ask them: How many men in the armies of China and Pakistan? How many guns have been sold in the first ten months after Obama was elected? How many insurgents are giving us fits in Iraq and Afghanistan? As Sam Houston said to Santa Ana, "Come take 'em".

Guns, excepting museum pieces or guns with historical provenance, as investments are a lot like gold, timing is everything and the lack of regular interest payments makes the long term outlook not so good.

But like gold, they have a roll as a hedge against really unlikely really bad times (as long as you've got plenty of ammo too!)

The enjoyment I get in the meantime from them makes me not worry about prices, although I expect to fund a good fraction of my retirement by slowly selling off my collection.

--wally.

 

[mjkten]

I don't see them as a financial investment, rather an investment in my physical security. Not terribly necessary most of the time, but I can foresee a time where they will be vitally important.

 

[huntsman]

Who can tell me what the prices on firearms were thirty years ago? Twenty? Maybe provide an example?

In 1982 I paid $180. for a NIB Ruger Blackhawk which now sells for over $400. new, this is more do to inflation then collectable value.

To buy a NIB gun today with the idea it will become collectable is kinda foolish to me, ask yourself what made the pre-64 Winchesters and old Colts increase in value. Then look at today's factory guns which have the fit and finish to set it apart from the others? today’s factory guns lack the refinements of finish that the older guns had but are still very serviceable.

While I wouldn't buy for collectability I agree that buying now to beat inflation is a good idea.

 

[Harvey]

Then look at today's factory guns which have the fit and finish to set it apart from the others? today’s factory guns lack the refinements of finish that the older guns had but are still very serviceable.

I think that you hit it here, huntsman. Most of the stuff they crank out nowadays just doesn't deserve the reverence of yesterday's materials and workmanship.

Of course, this goes for most any durable good, large or small.

 

[harmonic]

Guns are traditionally a poor investment unless you can find someone who's extremely hard up for cash or doesn't know what they've got. But with the internet, people are very savvy about gun values.

Some guns appreciate in value, true, but it takes a looong time to see it. I've been doing this for about 30 years and can tell you that if you want an investment vehicle, a savings account with even a few percent interest will serve you better.

Like someone already said, guns are not liquid. It takes time to sell them and in a recessionary economy, might not sell at all.

 

[Gatorbait]

VictorOneEcho, In 1941 near Miami a potato field below my house was mechanically harvested, and I went down there afterwards and filled up a sack with about 100 pounds they'd missed. I sold those to a restaurant for $13.00 and with that I bought an 1890 octagon-barrel Winchester .22 short pump (held about 17 rounds, I think). How did I know something the Japanese did out in the Pacific would make .22 shorts almost completely unavailable? But back to the story. I've seen those guns at shows for about $800 and just Googled them up. They reached from $1,000 to $2,000+. Of course, that was almost 70 years ago. Oh, just forgot, my always considerate father and stepmothereither threw it away or gave it away later in the '40s. What difference? I had an M-1, anyhow. LOL (now)

That was a good appreciation, I guess. For fun, even though I'm not the best of taking care of things, let's see the percentage from $13 to $1,000. Then the Dow-Jones Industrial average 131 (end of 1940) - 10520 (closed yesterday).

Good grief! Rifle increased by a factor of 76.9; DJIA by 78.2. Just flip a coin.

 

[ganymede]

Rifle increased by a factor of 76.9; DJIA by 78.2. Just flip a coin.

why flip a coin? if you get about the same return id rather have the guns!

 

[roo_ster]

There is no hard & fast rule on guns as investments.

There is the typical collector market, where unfired & near unique specimens bring high dollar and require some serious knowledge.

The latest plastic fantastic (Glock, S&W MP&, etc.) bought new is likely a poor investment, as can be seen in the pages of CDNN & others that wholesale LEO turn-ins where you can get a functional equivalent for half the $$$.

Some milsurp rifles bought when common and held on to until they are all in private hands can be a smart investment. Swede Mausers fit this category, as does the FR-8 I bought right at the end of their availability. OTOH, there are so many Russkie/Commie Mosins that it will be a good while before they appreciate.

Most firearms are not a great investment, but keep up with inflation and are a hedge against inflation like gold & other commodities. Expect to see all arms & ammo to go up as the dollar's value is inflated away. You can see this effect in the stock market, where there hs been no growth to speak of but the market is "increasing." I bet if you compared the "growth of the stock market prices and compared them to a more real measure of inflation than the CPI you'd find the stock market merely keeping pace with inflation.

 

[THE DARK KNIGHT]

Modern firearms as an investment? Nah.

I'd go with real estate over guns. Even stocks, or bonds, money market, CD account, just about anything over guns.

I know lots in Cape Coral, FL were going for $5,000 a piece in 1999-2000. Even with the whole "crisis" the damn things are worth $25,000 now. That's an investment.

Some firearms actually are rare, or collectible, or historic. But for the most part, the fluctuation in prices of guns has little to do with availability or anything like that, and more of just waves of fear created in response to a non-republican getting elected to an office. Look at this years boom (and subsequent bust). All that panic...for nothing. AK's went from $350 to $850 and now they're down to $350 again less than a year later.

The only worthwhile modern gun investment I can see is buying a couple "assault weapons" at regular prices, then waiting for another panic attack and sell it at ripoff prices.

 

[ny32182]

Guns are hobbies, not investments. No matter how much we'd like to spend our life savings on guns, if you do so, well, you'd better hope SS is still solvent by the time you retire. Guns holding more residual value than the stuff associated with most other hobbies is a nice side benefit, but an "investment", it most certainly is not.

Even the story of "I bought a rifle in the 40's for $100 and it is worth $2k today"... examine that, and I'd bet that doesn't even match inflation. $100 was a lot of money back then. $10k annual income was upper class. Look at the value of that $100 if it had been invested in a simple no-brain market-tracking fund in the 40's and forgotten about for the next sixty years. It won't even be close. Long term strategic market investing is the best, most proven way to build wealth... end of story.

 

[wgsigs]

It's your money and you can do with it whatever you want. However, my personal opinion is that guns are a terrible investment, especially if that is your entire portfolio. As someone mentioned earlier diversification is the key to long term investment.

Also, investing in something is dependent on having a reliable market when it comes time to "cash it in". Who knows which guns will be "fashionable" in the future. I would argue that the collector gun market is relatively small and volatile and that trying to pick which guns to invest in is probably as difficult, if not more so, than picking stocks. How many of those guys with tables at gun shows are attempting to liquidate some of their investments?

I would also be cautious about using anecdotal evidence as proof that guns in general will reliably appreciate in value. I bought a nice Italian racing bicycle for $275 back in the '80s. It was stolen about 10 years later and the insurance company paid me fair market value for it of $1200. While not as dramatic appreciation as some of the guns mentioned, it certainly out-performed my stock portfolio. However, I never considered investing in Italian racing bikes. I think inflation probably played a large part in that case. Besides I can always point to stocks like Wal-Mart that 100 shares could have been purchased for $1600 that is now worth over $3 million. There are very few, if any, guns that can claim that rate of return.

I personally buy my guns to shoot. I don't think I could stand to have them just sitting in a safe "appreciating".

 

[84B20]

I don't see them as a financial investment, rather an investment in my physical security. Not terribly necessary most of the time, but I can foresee a time where they will be vitally important.

+1 several times over!

 

[rogertc1]

I have never bought for investment. I like guns and would rather put my play money into them say instead of alcohol and gambling. Thus I have a lot that I will never sell. After I die my son gets them all.

 

[ccsniper]

I bought a Bushmaster ORC pre-Obama scare for $880.00 and with the current market and upgrades that I have done I feel confident I could sell it now for upwards of $1300-$1500.

No offense, but that is assuming that their will be a market for it. I have bought guns because they were cheap and knew that within a few years wouldn't be (Mauser rifle). The problem with buying guns for investment is you don't really know when there will be a market for them. Say you buy 10 AK style rifles and stick them in a closet for 20 years. In those 20 years the price does go steadily up, then a recession hits. You lose your job, so you pull out your trusty investments and try to sell them, problem is no one else is able to afford them now cause of the higher price and they don't have jobs either.

Bottom line, if you can't sell them then there will be no money. This is just how I think, YMMV.