Understanding and Investing in Collectibles

Sans Cash Flow Entitlements

[By Staff Writers]

Join Our Mailing List 

Many medical professionals have a broad range of investments that are typically not securities and rarely provide entitlement to specific cash flows.  One example is collectibles, which are durable real property expected to store value for the owner. 


According to Jeff Coons PhD, CFP™, the term collectible may represent such items as artwork, jewelry, sports memorabilia, stamps, and wine. While a detailed discussion of the wide variety of collectibles markets is outside the scope of this post, there are common characteristics of collectibles as an investment. 

Common Collectible Characteristics

First, the value of a collectible generally rests entirely in the eye of the beholder.  Since there is typically no cash flows associated with a collectible, unless the collector charges at the door for a look at their collection, the value of the collectible is only what another collector is willing to pay for that particular item. 

Second, while there are some collectibles that may be considered standardized across individual pieces in terms of quality and other defining characteristics, collectible investments are generally unique.  As a result, there is typically not an active market with prices established on a regular basis for most collectibles in a manner similar to the stock and bond markets.


In total, the lack of ongoing cash payments from a collectible and the general non-comparability of items result in the collectibles market being more of a knowledge-based market than most of the investments discussed on the E-P.  Since the value of a collectible is limited to the amount that another collector-investor is willing to pay for the item, a knowledgeable investor may be able to benefit from the lack of information of another investor. 

By the same token, if a physician-investor does not have superior information regarding the value of a collectible, then the basic lack of economic fundamentals behind a return assumption for such investments makes collectibles generally less attractive as compared to investments providing ongoing cash payments.


Your thoughts and comments on this ME-P are appreciated. Feel free to review our top-left column, and top-right sidebar materials, links, URLs and related websites, too. Then, subscribe to the ME-P. It is fast, free and secure.Link: http://feeds.feedburner.com/HealthcareFinancialsthePostForcxos

Speaker: If you need a moderator or speaker for an upcoming event, Dr. David E. Marcinko; MBA – Publisher-in-Chief of the Medical Executive-Post – is available for seminar or speaking engagements. Contact: MarcinkoAdvisors@msn.com


Risk Management, Liability Insurance, and Asset Protection Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™8Comprehensive Financial Planning Strategies for Doctors and Advisors: Best Practices from Leading Consultants and Certified Medical Planners™


One Response

  1. 5 collectibles soaring in value

    Increased interest in these high-end investments has helped raise their value recently.


    Record auction prices haven’t hurt.



Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: