AW Daily - Tips & Tactics - Before the Auction: Buying on Speculation

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Before the Auction: Buying on Speculation continued ...

Flow, Show, or Stow Your Stuff
On flowing your stuff: Obviously, the key to profiting from an invested buy is selling when demand (and prices) will be highest. Look for events (historical, film, media) that will make your item particularly sought after--then sell! Sometimes the best time to sell is immediately after purchase. If you're holding a trendy item that is virtually impossible to obtain, demand will be high. However, if you hold on too long, the demand might bottom out, and you could be stuck with a fad gone bad (anyone want to buy a Furby right now?).

On showing your stuff: Some of your best sales happen when you're not actively selling. If you have some great items that you're holing up, put them up for view on a Web site. You can easily obtain free Web space from a variety of hosting sites (Geocities, Xoom, AngelFire, etc.) where you can show off your cool stuff for any passersby to see. Frequently, visitors will ask if the items are for sale, which could spell great profits for you.

On stowing your stuff: Some items you speculate on will need time to "mature" to reach their highest value potential. If you're buying items like limited sculptures, Christmas ornaments, character icons, or whatever, you might need to sit on these a while before the true value can be realized. Figure that most pop-culture items need around 20 years to reach maturity--the point when younger folks of that day have also matured and now feel a tug of nostalgia for reminders of days gone by. Therefore, find good storage for these items--someplace dry, dark, and solid. Believe it or not, the time will click by sooner than you realize, and before you know it you'll be sitting on a nice nest egg full of the items people are now clamoring for.

Stuff It?
And what if your great investment turns out to be a great imitation or unwanted purchase? Whether you speculated on a fake, a flop, or a truly "fabled" relic, you haven't lost everything. On the contrary, your expertise grows when you make occasional mistakes. Savvy investors and experienced collectors know as much about imitations as they do about authentic items. Such knowledge helps you quickly determine the true origin--and hence, the true value--of the item in question. If it's a speculation that shows no promise, then you sharpen your eye and instinct for which types of items might be a hit and which are better missed (although there is definitely no foolproof science for predicting a winner).

And what about that knockoff item you thought was the real magilla? Well, don't trash it just yet. Unless you can return it for a refund, you'll have to decide what value (if any) it might still hold for you. If it's a functional item that can be used (whereas an original would only be displayed), then use it. If it can serve as a piece of decor, then display it. If it can be sold, then sell it--just don't misrepresent it as an original. Or donate it to a charitable cause and take the tax write-off.

And if what you've invested in is the real thing, but it's not showing signs of increasing in value, well, then you either live with it and enjoy it for your own uses, or you get rid of it. If you can sell the item and recoup your original cost, consider your sell extremely successful. If you take a loss on the sell, chock it up to experience. It's all part of the investing process. Be shrewd, be well informed, and be of good faith. Very few get rich overnight.

Buying for Resale
Finding Bargains
Verifying Items