Does the stock market affect card prices?

[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.