March 24, 2013

Investing in Comics: Not Just for Superheroes

Experts share several key techniques for taking advantage of market trends—past, present and future

A collection of comic books  ready for auction. (Photo: AP) A collection of comic books ready for auction. (Photo: AP)

Many baby boomer clients (and advisors) may yearn for their long-lost comic book collections. Maybe Mom threw out them out or they went missing during college or a move.

Regardless of how the comic books “disappeared,” one question is always the same: Are comics a valuable asset that’s worth holding on to?

Experts say, such thinking may reveal more fantasy than fact. Most comic books that sit around basements or garages aren’t usually kept in top condition and very few are highly prized collectables.

Still, for those who do own well-kept and much-sought-after comics and comic art, collecting comics can be profitable. (Comic art, experts note, is defined as the original pen and ink artwork from the artist that publishers would use to make the production art from which the comics would be printed.)

Consider recent sales activity for comics and comic art at Dallas-based Heritage Auctions, which launched its comics business in 2001.  

Barry Sandoval, direction of operations for the comics division, says that yearly sales were between about $10 million and $15 million in the 2006-2010 time frame.

But in 2011, sales reached nearly $25 million. Last year they hit $37 million.

Sandoval points to several factors driving the increased volume. One is live auction bidding over the Internet, which opens up sales to a global audience.

Another trend is that rising prices for the highest-quality items add credence to the idea that there is some serious money in comic and comic art.

“We became the first to auction a $1-million comic book a few years back when we had the Detective Comics 27,” said Sandoval, in an interview with AdvisorOne. “That was in 2010 and, at the time, the auction record for a comic was just over $300,000.

Since then, Heritage Auctions has had “a number of six-figure results both for comics and for original comic art,” he adds.

“It just seemed like once there were a few sales on that level, people just became more comfortable with paying those kinds of amounts for comic stuff,” Sandoval explained.

There are several keys to successful comic book investing, Sandoval believes.

The first is to buy the highest-grade publications an investor can afford, even if the price seems exorbitant.

He cites an example of a Fantastic Four #1 that sold at Sotheby’s in 1993 for $27,600. Back then, this was “unheard of money” for a 1960s comic book. Heritage sold the same copy last year for $203,000.

The second factor to consider: Which comics will future collectors value?

Collectors should try to anticipate which characters are going to have significance in the future, he advises. For example, what will today’s 13-year-old want to buy in 20 or 30 years, when he or she has the funds for serious collecting?

“Somebody like Spiderman or Batman, you know, they’re in movies now, they’re still a force in pop culture. That would be something to gravitate toward for sure,” said Sandoval.

In contrast, with characters like Roy Rogers or Gene Autry, the generation that grew up with the Westerns is pretty much at the age where they’re selling their collections now and not buying comics. “You always want to kind of look down the road and figure what people are going to care about in a few years,” he explained.

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