Posted By:
warshawlawRich, somehow I figured you for a mudder 
I know lots of people here made lots of money buying and holding commons from popular sets at the start of the grading thing. Congratulations. However, if you really want to talk investment, you have to admit that timing and luck in choosing which cards to get into were your real keys to success. Anyone who bought truly high grade cards at the beginning of the slabbing thing is rich today if he happened to buy the right cards that happened to be truly high grade and happen to be demanded today by the set registry collectors. If you put your ducats into 1950s or 1960s PSA 8 cards instead, you didn't make 20x your money. As I recall, the grading emphasis shifted on those cards from 7 to 8 to 9 and 10 as the lower grade cards came to the market with greater frequency. I saw lots and lots of those 8's rotting at the National; anyone wanna argue that they were making nice money for their owners?
The other issue is rate of return versus risk, which is where Jay's point comes into play. If I was investing in cards like stocks I would look for deals that I could get into and out of within 6 months with a return of at least 200% because I would prefer not to tie up my money for the long term in things as illiquid as cards and I would also prefer to spread my risks across a lot of solid material instead of one super premium item dependent on finding a niche market to sell. If you cannot be into something for years on end, you can only be into it with play money. Ditto if you have to gamble on 1 or 2 items going through the roof. If you happen to be rich and have lots of play money, you can pay a then-unheard-of price for a card and hold it for years, sell it or whatever because it isn't a painful impact on your finances if it flames out. If not, you have to spread your risks by not tying up all your money into a few ultra-high-grade cards, especially commons from a common set that happen to be desired by a small group of collectors. I'd buy solid examples of high demand players at good prices instead of taking a flyer on a few commons that happen to be in nice plastic because I don't have the bankroll to handle the latter.
I also agree with the poster who remarked that rarity should be a benchmark of purchases. Something really scarce is always going to have a market and in my view is a safer card to own than a condition rarity from a common set.
If you are taking investment advice from this motley crew (your humble writer included), good heavens, don't buy cards. We'd all collect even if we were back in the church basements at a dime a card. Put your money in a nice, safe mutual fund that won't allow elite hedge funds to buy after hours...er, stock in companies that don't have to restate their earnings...er, spec houses in San Diego...er....