Does the stock market affect card prices?

[Snapolit1]

In analyzing historical card prices on VCP, it's clear to me that many high end cards (not all, but many) peaked in value in 2007 and 2008 and took serious dips when the markets tanked. Cards that sold for $15,000 in 2008 dropped off and were selling for 2/3s that a year later. Obviously not true across the board. Most of them have worked its way back by now, but I have seen the same general graph a number of times.
I think the moral of the story is that things will take a hit if the market gets whacked but if you are not a short term seller or dealer don't sweat it.

[vintagetoppsguy]

I replied in the other thread, then saw this one on the main page. I just quoted what I said in the other thread...

Originally Posted by vintagetoppsguy

I can only speak for myself, but I haven't stopped collecting, just slowed down quite a bit.

In addition to the stock market, I happen to work for an oil and gas engineering company and our industry looks very gloomy for the next year or so. I'm on a project that wraps up in early Spring, but I don't know if I'll have a job after that. There are no new projects coming in. So that, along with the stock market downturn, has put a damper on my spending lately.

[packs]

I don't invest in stocks but I certainly hope this is true. I just wish more people in China collected.

[1952boyntoncollector]

there is also the possibility that people downsize their collection and use the funds on cards sold to buy the waterfront property cards..

[Mountaineer1999]

I've just noticed I'm not as in a spending mood after seeing red day after day. I would think that would be the case for most card collectors who have money in the markets. To get a real pullback in card prices I would assume that we would need a major market correction where some in the hobby would actually start to sell their cards. How would card values hold up in a recession....

[Rich Klein]

Yet in 1987 when the market tanked; prices exploded on all cards old and new

[oldjudge]

Everyone is in a different situation. However a lower stock market should translate to a decline in average disposable funds, which should result in lower prices for all non-essential items.

[Yoda]

I believe there is a direct correlation between the two. If the market is up and people are feeling good about the financial future, then I imagine they are more willing to go after big $ cards up to a point. I know that is the way I operate and with the big drop since the first of the year I probably will be sitting on the sidelines for a while unless real value presents itself. I believe there is a higher percentage of Americans in the stock market through 401Ks and IRAs than many people imagine and market movements will inevitably affect spending. I believe it will be interesting to see final prices realized in the current auctions, Mile High and For the Love of the Game, to see if the market pullback has any affect. Just remember what Chairman Mao said, "May you live in interesting times."

[BobbyVCP]

Originally Posted by Snapolit1

In analyzing historical card prices on VCP, it's clear to me that many high end cards (not all, but many) peaked in value in 2007 and 2008 and took serious dips when the markets tanked. Cards that sold for $15,000 in 2008 dropped off and were selling for 2/3s that a year later. Obviously not true across the board. Most of them have worked its way back by now, but I have seen the same general graph a number of times.
I think the moral of the story is that things will take a hit if the market gets whacked but if you are not a short term seller or dealer don't sweat it.

In your research are these 1 pop cards that dropped in value? I find that as the population of a high grade card increases then the value drops dramatically. I think if the population did not increase then the value increased.

[RTK]

Good question, interesting. Maybe there should be an index for card collecting using certain highly "traded" cards or "iconic" cards from various years similar what's used in the stock market to reflect overall market variations, along the lines of the S & P 500 or Russell 2000.

[sb1]

Often times when the stock market is depressed, investors put their disposable money to work in other areas, as a hedge. Collectibles of all types are one area. High value coins and art are some of their main focuses to achieve a better rate of return than the market may offer. In the last decade or so there has been a move to high end baseball cards as well.

As is the case often times in the stock market, when prices are down, some people sell out either due to panic mode or cash flow, the saavy investors are there with cash in hand to buy at the low end and ride it back up in a few months or years. The collectible market being no different, I believe you will see cards of smaller value i.e. $100 to 10,000 take a lower tracking when the stock market is down, as collectors sell off, even some of the $10,000 to $100,000 items may sag a bit, but not nearly as much. By then the items have been absorbed by the investor type, who may well be a collector as well. They are prepared to wait for the return to previous levels and/or set new highs.

You really have two different price points at work, the lower end does not have enough strength or conviction from new buyers to keep prices rising and an oversupply of cards being offered, while the higher end market has an influx of capital and a very short supply of scarce/high grade material. 1952 Mantle or 1955 Clemente in high grade being prime examples, as well as Baltimore Ruth's etc.