Can Magic: The Gathering Cards Outperform the Stock Market?: An In-depth Analysis
While history shows that the stock market is the most reliable way for the average person to accumulate wealth over time, alternative investments have been popular for centuries. Especially for the wealthy, seeking out investments beyond stocks is part of having a well-diversified portfolio. Two centuries-old institutions, Christie’s and Sotheby’s, exist in part to serve this market.
Alternative Investments: Beyond Stocks
Trading cards might not rise to the level of fine art, but they can have more intrinsic value than a duct-taped banana that recently sold for $6.2 million. Alternative assets like Magic: The Gathering cards have their unique appeal and have shown significant returns over time.
Magic: The Gathering – A Popular and Enduring Tabletop Game
Magic: The Gathering, a tabletop and digital card game from Hasbro’s Wizards of the Coast division, has proven to be a popular and enduring playing and trading game. Some of the most valuable MTG cards have vastly outperformed the S&P 500, though there is not the same liquidity and transparency in pricing.
Collectible Cards: A Multi-Billion Industry
Baseball trading cards were one of the first collectibles to really gain popularity and it continues today. For example, sports trading cards, particularly baseball cards, are still a multi-billion industry. Consulting firm Market Decipher predicts the sports memorabilia market will grow to almost $20.5 billion by 2032.
Magic: The Gathering vs. Stocks
While some Magic: The Gathering players view themselves much like stock investors, seeking out the most undervalued cards and sets on the market, there are major differences between buying a stock and buying a Magic card. The stock price of a company is the same no matter where you look it up, but the price of a Magic card can fluctuate dramatically.
The Complexity of Magic: The Gathering Trading
For instance, the average price of a Swords to Ploughshares card on MTGStocks is $2,209.99, but the most likely selling price based on recent sales data is $325. Prices can vary significantly between different marketplaces and platforms. Additionally, while Tesla shares trade daily in large volumes, a Magic card might only be bought or sold once a month or even a year on the trading sites.
The Returns of Popular MTG Cards
Despite these differences, some Magic: The Gathering cards have shown remarkable returns. For example, the Sol Ring card, which has been released in multiple sets, had a return of 627% between its earliest price in 2012 and its current price. Craterhoof Behemoth and Gaea’s Cradle, two other popular cards, have shown returns of 1,089% and 1,082% respectively.
The Impact on Individuals and the World
For individuals, the potential to make significant returns from Magic: The Gathering cards can be an exciting prospect. However, it’s important to remember that the market is less liquid and transparent than the stock market. Additionally, the value of a card can be influenced by factors such as rarity, condition, and demand.
At the world level, the collectible card market, including Magic: The Gathering, can provide an alternative investment avenue for people looking to diversify their portfolios. However, it’s crucial to remember that these investments come with their unique risks and challenges.
Conclusion
Both stocks and Magic: The Gathering cards can have their peaks and valleys, and the Covid-19 pandemic lockdowns caused a spike in interest, playing, and card value. However, the liquidity and transparency of stock prices compared to MTG cards mean investors would be better off buying stocks rather than trading cards for the majority of their investment portfolio.
Ultimately, Magic: The Gathering cards can be a fun and engaging hobby, but they should not be the sole focus of an investment strategy. Diversification is key to building wealth, and stocks remain the most reliable and accessible investment vehicle for most people.
- Magic: The Gathering cards have shown significant returns over time, but they are not as liquid or transparent as stocks.
- The collectible card market, including Magic: The Gathering, can provide an alternative investment avenue for people looking to diversify their portfolios.
- It’s important to remember that the value of a Magic: The Gathering card can be influenced by factors such as rarity, condition, and demand.
- For most individuals, stocks remain the most reliable and accessible investment vehicle for building wealth.
