A '93 card featuring Yankee Derek Jeter (Photo: Heritage Auctions)

If your last experience with collectible sports cards was buying a package to get a stick of bubble gum, you’re in for a surprise. Cards have evolved into collectibles, with independent quality-grading companies, hard plastic holders to protect them and a plethora of buyers, sellers and shows.

Prices at the top end of the market continue to move higher, although as with any collectible, there is a risk that prices can drop rapidly if collectors’ tastes change.

Chris Ivy, director of sports memorabilia for Dallas-based auctioneers Heritage Auctions, follows this market closely. In February, Ivy presided over the firm’s Platinum Night auction in New York, when almost $10 million of sports memorabilia traded hands. He answered some questions from ThinkAdvisor recently on demand for these popular cards.

Do you have a sense of the size of the collectible sports card market?

The trading card market is so vast and varied that placing an annual figure on sales would be little more than a guess, but I’d imagine it’s somewhere in the neighborhood of the low hundred millions.

This would encompass both the modern material that is sold by trading card manufacturers and the vintage, secondary card market, which is our specialty at Heritage Auctions. Our card sales have grown at least 20% each year since 2004, which is a factor of both the escalating prices for cards and a greater volume of cards sold.

Are any sports’ cards more popular and in demand than other sports?

Baseball is, by far, the most powerful trading card market.

It was about 60 years between the first baseball card and the first football card printing, so baseball has enjoyed an enormous head start. The gap has surely narrowed in the modern market, but vintage baseball card collectors outnumber the other sports by many multiples.

How do you distinguish among collectible cards’ sub-markets?

Vintage vs. modern would be the clearest delineation in the card market.

Typically “vintage” is considered pre-1970, which was about the time that the volume of production from trading card printers increased dramatically. Particularly when you reach the 1980s, you’ll find full sets still in the shrink-wrap selling for less than the original retail price. [There’s] too much supply, even with a sizable demand.

What factors determine a sports cards’ collectibility?

Like any collectible, rarity and desirability are the factors driving value. Obviously there is always a strong demand for sporting legends, but a very rare card of a “common” player can be worth multiples what a Hall of Famer’s card from the same issue can command.

But all else being equal, the subject’s fame will be the first consideration. Is collectors’ interest in and demand for cards growing, and what submarkets are attracting different levels of interest?

From a pure[ly] investment standpoint, one would be hard-pressed to find any market that has grown the way the trading card market has. This is particularly true at the top end of the market.

The famous Honus Wagner T206 tobacco card, widely considered the hobby’s Holy Grail, rarely sells for less than half a million dollars today in decent condition.

Those same cards were selling for approximately $100,000 10 years ago.

Every portion of the card market has grown considerably, but the elite pieces are commanding many multiples of what we were seeing a decade ago.

What are the different price categories in collectible cards?

There are cards that sell for a fraction of a penny all the way up to seven figures.

The vintage card market makes up a fairly small percentage from a volume standpoint, but a considerable portion of the market in terms of value.

To get serious about collectible cards, what financial commitment is involved, and how can an investor avoid overpaying?

The best advice I could give to a novice entering card collecting from an investment standpoint is to stick to vintage material.

Mark McGwire cards that sold for $1,000 in 1998 are selling for $10 today. That’s just part of the risk.

Vintage cards are far less subject to large downturns. Buy the best quality card you can afford. You’re more likely to see a value hike in a high-grade card of a decent player than an average condition card of a star player.

The big winners in the investment game have typically been high-grade rarities.

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