S&P 500 vs Charizard: Which Investment Wins?

S&P 500 vs. Collectibles: Which Investment Wins? (0:00)

Brian: Are collectibles actually a better investment than the stock market?

[Clip] Areas like Pokemon right now are really interesting and compelling. Pokemon is up triple digits year-on-year in terms of growth, with collectors really driving enthusiasm. I’d rather own a trading card than the same equivalent of a stock.

[Clip] Trading card sales are up nearly 30% in the last five years.

[Clip] The Jordan Kobe dual logo man we bought last August for $122,000. $1.7 million right now. It’s done way better than crypto, way better than the S&P 500.

[Clip] 100 shares of Tesla is not as interesting for me going up as one rare rookie card.

[Clip] Because if you had invested in a pair of Air Jordan 3 Black Cement in 2011, you could either be wearing them on stage or have earned 162% on your money, double the S&P and 20% more than Apple.

Brian: And that’s why we’re talking about five of the most popular collectible assets to see how people are investing in them and, more importantly, how they’ve actually performed. The collectible asset classes consist of any number of physical items that people seek out because of their cultural, historical, or artistic appeal. Over time, a lot of these items have developed active resale markets where the value is driven by factors like rarity, condition, popularity, and buyer demand. So why are people investing in collectibles? Well, for one thing, they’re tangible. You can actually hold them, display them, and show them off. And they often have some kind of emotional or nostalgic value to those who buy them. Many people also see them as a hedge against inflation. And headlines about Pokemon cards selling for millions can make collectibles sound like a relatively easy way to make a lot of money. Let’s look at some trending collectible assets and how each of these categories has actually performed.

Pokemon Cards: The Charizard Phenomenon (1:49)

Brian: Pokemon cards. Spending on non-sports trading cards, including Pokemon, jumped 350% between 2020 and 2025. So how have Pokemon cards performed as an investment? According to analytics firm Card Ladder, Pokemon cards as a category have returned over 3,800% since 2004. That dwarfs the S&P 500’s return over the same period. Vintage sets have consistently shown the strongest long-term appreciation. The original base set Charizard, for example, nearly doubled in value between 2023 and 2025 in near mint condition. So are they a good investment? We’ll get to that in just a bit.

Luxury Watches, Fine Wine, and Rare Whiskey (2:36)

Brian: Let’s look at luxury watches. Investors are buying pre-owned timepieces from high-end brands like Rolex and either holding them for long-term appreciation or flipping certain models on the secondary market. The pre-owned luxury watch market reached approximately $25 billion in 2025, and platforms like Chrono24 have made buying and selling far more accessible than it was a decade ago. So how have luxury watches performed? The five-year returns from 2019 to 2024 for the top three brands are impressive, ranging from 97% all the way up to 207%. However, in the last two years we have not seen those same type of returns, and only the most sought-after timepieces from the top brands have consistently held their value.

Brian: Fine wines and rare whiskey. Fine wine investors buy investment-grade bottles from France and store them in professional climate-controlled wine warehouses to maintain their condition. And platforms like Vivino allow investors to purchase fractional shares in wine portfolios without actually having to store any bottles themselves. On the spirits side, rare Scotch single malts and American bourbons like Pappy Van Winkle are highly sought after by collectors. So how have these performed as investments? The Liv-ex Fine Wine 1000 index has delivered an average annual return of approximately 9.5% from 2005 to 2025. Rare whiskey has been an even stronger performer over the past decade, with the Knight Frank Luxury Investment Index recording a 288% increase in whiskey values over the past 10-year period ending in 2024. But if you’ve seen the recent downward trend in alcohol consumption, I’d be a little nervous if I were banking on my collection of Pappy to fund my retirement.

Fine Art and Classic Cars (4:36)

Brian: Fine art. Fine art investors buy original works through auction houses like Christie’s, Sotheby’s, and Phillips, or directly from galleries. Platforms like Masterworks allow people to purchase fractional shares in high-value artworks, which lowers the barrier to entry. Fine art has delivered an average annual return of approximately 8.9% from 2000 to 2025.

Brian: Classic cars. Collectors buy vintage and classic vehicles and either preserve them for long-term appreciation or actively flip the most desirable models. The classic car market had a strong run through most of the 2010s and even into the early 2020s. Hagerty’s Blue Chip Index, which tracks 25 of the most sought-after post-war collector cars, outperformed the S&P 500 for nearly two consecutive decades. But that changed in 2024 when 46% of the models they tracked fell in value.

The Hidden Costs of Collectible Investing (5:35)

Brian: So back to our initial question: are collectibles a better investment than the stock market? Well, the historical average return of the S&P 500 is around 10%. And as you’ve heard, some of these collectible assets have outperformed that over certain periods of time. But it’s not quite as simple as just looking at those returns. Collectibles begin to lose some of their appeal when we look at the risk and hidden costs involved.

Brian: Starting with illiquidity. Collectibles are not a liquid market. When you own shares of an S&P 500 index fund, you can sell them in seconds at market price. When you own a 1972 Ferrari or a rare case of Burgundy, you have to find a specific buyer who wants that exact item at the right time at a price you both agree upon. That process can take weeks, months, or even longer. And more often than not, the faster you need the money, the less you are going to make.

Brian: Another big risk is subjectivity. The value of a collectible is not determined by earnings, cash flow, or any objective financial metric. It is determined by what someone is willing to pay for it on a given day. And that is heavily influenced by trends, nostalgia, and celebrity attention, all of which can shift in a moment. Just look at what happened with Beanie Babies. There was once a serious market for those, and now even Pinchers the Lobster is only worth around $6.50.

Brian: Another consideration is the carrying cost, and this is the one that people forget about. Every collectible asset class comes with some kind of hidden costs. Pokemon cards need professional grading to be worth serious money. PSA grading runs $25 to $300 per card, plus shipping and an annual membership. And once graded, they need climate-controlled storage. Luxury watches require specialized insurance and professional servicing every five to ten years, which can run $500 to $1,500 or more per service. Wine needs temperature-controlled storage. Fine art needs museum-quality climate control. And classic cars need secure storage, maintenance, and sometimes costly restoration.

Brian: And then there are the transaction fees. Auction houses charge sellers 10 to 15% of the final sales price. And you have to add in the buyer’s premium, meaning they get you on both sides, which can add up to 28%. The combined transaction cost between buyer and seller can eat up 25 to 35% of the total transaction value. Even if you’re just selling Pokemon cards on eBay, the seller fees are around 13%. So even if you have a card worth $100, you’re not getting $100 for it.

Brian: And many people don’t even know about the tax implications. The IRS actually treats investment-grade collectibles differently from traditional financial assets. As part of the Taxpayer Relief Act of 1997, Congress lowered the top rate on most long-term capital gains but deliberately left collectibles at the old 28% maximum rate. So when you sell stocks or index funds that you’ve held for more than a year, your long-term capital gains tax rate is either 0%, 15%, or 20% depending on your income. But when you sell a collectible after holding it for more than a year, the gain is taxed at your ordinary income tax rate up to the maximum federal rate of 28%. When you add in state income taxes, a high-income collector could be looking at a combined federal and state rate of almost 40% on a profitable sale.

Where Collectibles Belong in Your Financial Plan (9:35)

Brian: Collectibles can outperform the S&P 500, at least in certain categories, during certain periods, for specific items. But there is an enormous difference between a market that can produce extraordinary returns and one that likely will produce them for you specifically. And when you take into account all of the hidden costs, it’s likely your returns will be way lower than you think. Compare that to a low-cost diversified index fund. It doesn’t have a broker fee of 10 to 30%. It doesn’t require climate-controlled storage. It isn’t taxed at 28% when you go to sell it. It’s liquid, so you can sell it any day the market is open at a known price and in seconds.

Brian: There is nothing wrong with collecting as a hobby. But collecting as a primary investment strategy is a different conversation entirely. If you ask millionaires how they built their wealth, very few are going to say it was with a mint Charizard.

Brian: I still don’t know the difference between a Pokemon and a Charizard.

Brian: Actually, Charizard is a Pokemon. We would encourage you not to be the person spending money on Pokemon cards and Rolexes instead of building your emergency reserves, funding your Roth IRA, and buying your first home. If you do want to jump into these passion investments, this belongs in Step 8 of the Financial Order of Operations, after the foundation is already in place. If you want to see exactly how the Financial Order of Operations works and how to build the kind of financial freedom that lets you eventually invest in the things you love, check out the video linked here. And as always, keep building towards your great big beautiful tomorrow.