Rifles/Handguns as Investments

Inflation means that your dollar are worth less than they used to be in strict unit amounts. Personally, it is hard to make a lot of money in firearms short of a really bad civil unrest or extended without rule of law situation. That being said, I've always made money on firearms as well. For instance, I bought a H&K P-30 9mm pistol a year ago for $820 with two magazines. I bought during the non-panic four additional mags for $30 a piece. My gun was selling for around $1000 used during the height of the panic, and as recently as two weeks ago, someone paid $115 for two of the mags on gunbroker.com. If you pick a firearm that is of high quality like an H&K and you've studied ahead of time that it can be at time hard to get extra mags, in time of a shortage if you have the gun and mags paired together and they are well-kept in terms of cleaning/no rust/etc, you'll never loose value, and often increase.

I don't recommend getting into really exotic guns that it is hard to find ammo or accessories/mags for, as you really have to be a professional collector to know what guns are likely to increase in value, and if so, which ones you'll be able to easily resell so your money isn't tied. If you google "blue book of guns" there are several books on the value of any given firearm to get an idea of what the market will pay in normal times for any particular model.

Remember, like anything, if you are buying guns as an investment, condition is everything. Make sure you have adequate storage so as to ensure the continued condition of your guns. At least guns aren't like cars, you don't need a heated warehouse, just a heated room/safe.

That said, there are many other things you can invest in that will yield more consistently than firearms in the long term.
If you are really serious about guns as investment opportunities, prepare to spend a lot of money. The more guns you sell for profit, the closer you are to being a gun dealer, which requires licensing and FFL paperwork.
Consider NFA licensing, legal fully automatic weaponry and exclusive collectibles seem to do better than anything.
Consider who is going to have disposable income to buy weaponry in 20-25 years, and what they would want to pay that money for.....right now its older gentlemen who remember their pre 64 winchesters, colt revolvers, etc...
You aren't going to pay for a summer house by selling a couple of handguns for $100 more than you paid for them.

Silicosys4 makes a valid point. You do have to tie up quite a few dollars to make a gain. That being said, firearms are a fairly safe investment. They will always keep their value and often make marginal gains, provided you've taken good care of them. I consider them an investment instrument more like bonds. You aren't going to make tons of money, but you aren't likely to loose it either. In some ways it might make more sense to invest in ammo in popular calibers if you can get it for a really good bulk price when you are NOT in a panic. When the next panic comes, you can see anywhere from 10-50% or more increases in terms of value, plus a common caliber like 9mm, 223, etc you can sell to anyone who has a gun that chambers it, whereas trying to sell a gun is much more specific as some people want certain models only, can't afford what you're asking for, etc. Ammo you can also sell it in bulk, or piece it out and sell it in smaller amounts depending upon the buyer's needs. In my opinion, good bulk buys on ammo are easier investment vehicles to make money in, provided you didn't overpay when you bought the ammo in the first place.

In all honesty, what guns may be out lawed in 30 years and cannot be sold?

If a person had vision they would know what to buy, pre-64 Winchesters a long time ago,, what is going up in 30 years and can be sold on the open market?

Kind of like the coin market, very risky.

fdf said:

In all honesty, what guns may be out lawed in 30 years and cannot be sold?

If a person had vision they would know what to buy, pre-64 Winchesters a long time ago,, what is going up in 30 years and can be sold on the open market?

Kind of like the coin market, very risky.

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I honestly think that firearms are a very solid investment, in that its hard to "lose" money, per say...(when was the last time you saw a "gun market crash")....but you have to be smart about it, spend large amounts of money on exclusive items to realize large profits, and realize that "keeping up with inflation" does not mean "making profits".
I often see people who brag about paying "only" $300 for a new colt python, or whatever they paid in 1972, without realizing that they really paid current market price, once adjusted for inflation.

Guns ARE NOT investments.

Everything, from stocks to education to bulk toilet paper, is an investment.

It's just that guns are usually fairly bad investments from a monetary perspective. Especially since in most cases the guns we deal with are the equivalent of Toyotas...middle of the road with very little chance of becoming collector items.

Guns ARE NOT investments.

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This.

Aside from the "it's hard to make a dollar investing in guns blah blah blah", my thinking is that anything weapons-related will forever be at risk of confiscation/pirating/outlawing/envying/theft . You get my drift. Just about any other kind of investment... say diamonds or art or something... actually have a lot of those drawbacks. But they don't have politicians trying to chip away at diamond rights or art rights. They don't have a government bureau dedicated to alcohol, tobacco and diamonds.

But I am of the capitalist persuasion. If someone wants to do it and has the means, have at it.

If you have that much money to invest in high-end guns, you need a financial adviser to steer you to the best stocks and bonds. Guns are not an investment when you factor in inflation. You might be able to sell a better quality gun in ten years for a few bucks more than you paid, but a decent investment portfolio will have gone up a LOT more

Guns are bad investments. There are very, very few firearms that are worth more now than they were when sold new.

The possibility of legislation outlawing/grandfathering is relatively high, which (I would assume) means supply steadily drops while demand remains constant.

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Not if they make transfers illegal.

Check out the situation with full auto arms. When they closed the registry they created a system where one Model X gun can be legally transferred, while a second identical Model X cannot. The transferable gun went up in value, the other became a huge legal liability that the feds will confiscate without any compensation if you are lucky, and arrest you at the same time if you aren't.

You can grandfather existing guns and bar transfers. Look at California registered "Assault Weapons". They are "grandfathered" if they were registered on time. They aren't worth much because you can't sell them to anyone in the state, and outside the state there are newer/better versions.

Whoever bought up all the Unica 6's when Mateba when belly up sure made a killing... He bought 'em for ~700$ and is releasing them occasionally for 3000$+ to this day

Like most low-return investment ventures, it only pays if you can buy into the table. You'll only make money if you can afford to hold onto warehouses worth of merchandise, and at that point, you might as well just run a business based off that (like CAI).

TCB

Sorry if somebody covered it already, but I personally do not think you should be investing in something that can be made worthless with the stroke of a pen.

Anything Evil in the gun world is a great investment. I have doubled my money multiple times on AR's, Uzi's, ect...

Every time ther is a panic I make a fortune and then but something nice for myself. I just picked up a nice Sauer & son 202 Forest in .308 with a Doctor 3x9 scopethat I would never have been able to afford with out panic pricing to help me finance it!

Firearms as Investments

Firearms, if purchased at a reasonable price, absolutely make good investments, so long as you do not spend money you cannot afford to lose.

Just ask my wife - she has heard me make that very statement (the first part of it, anyway) a number of times!

Beanie-babies are easier to store and you don't need a license to deal in them.

Guns are bad investments. There are very, very few firearms that are worth more now than they were when sold new.

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This is true of the cheap budget guns now flooding the market. But virtually every gun I own will sell for more than it cost new, some quite a bit more. The secret is to buy quality, buy smart, buy used., and keep them for a while. Some guns have appreciated in value quite a bit. I have about a dozen Marlin and Winchester lever guns made beween 1958 and 1975. They sold for between $50-$150 new. Any decent shape lever action is selling for $300-$500 now.

I still think that overall guns are not a wise investment. I wouldn't buy up something just because I think I can make a dollar on it in the future. Too many unknown variables that can happen in the future that could dramatically reduce value. I buy quality guns that I like and that I want to use. Overall they do tend to increase in value. Right now they are increasing in value faster than money in the bank, but I wouldn't bank on that trend continuing long term. Pun intended. You also have to consider inflation. Just because you bought a rifle 40 years ago for $100 and it is worth $500 today doesn't mean you made any real money. $100 would have bought you 250 gallons of gas 40 years ago. $500 will only buy you about 150 gallons of gas today.

I honestly think that firearms are a very solid investment, in that its hard to "lose" money, per say...(when was the last time you saw a "gun market crash")....

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Peoples tastes change. Remember my inflation example above. Manufacturers come out with new guns that often ruin the value of older used guns on the market. Gun markets crash quite often. My levers are probably at the peak of their value. In another 25-30 years their value won't keep up with inflation. Right now there are enough old farts like myself that like them to sell them at those prices. Most of my kids generation will have no interest in them. For the ones who do want one there are about 7 million Marlins and a like number of Winchesters to go around. I predict they may tend to increase in value, but at a much slower rate than inflation. When that happens you are really losing money, not gaining.

A pre-64 Winchester is another perfect example. From 1964-1994 any pre-64 sold at a premium because they were the only option for a USA made CRF rifle. In 1992 Ruger bought out a CRF rifle, Winchester brought out a much improved CRF rifle in 1994 and now Kimber is in the mix. A common pre 64's value has been declining for 20 years and now most only bring slightly more than any other 50-60 year old rifle. Rare configurations and calibers still bring a premium, but that is true with any brand of gun.

With an additional $1500 a month of disposable income, I would consider doing several things before buying guns as an investment:
-- Pay down/off a mortgage. If I didn't own a home, I would try to buy something nice and modest that would be relatively easy to sell down the line
-- Depending on where you live, buy additional land. I'm not necessarily talking about flipping lots in a city or a suburb, but instead buying some land in the "country" that I could shoot/hunt/fish/camp on, and build on down the line. Land is a decent investment... they aren't making more of it.
-- With the recent dip in metals, consider buying some silver and gold as an inflation hedge.

Investing in guns is tricky. Yes, there are a lot of guns that have increased in value considerably since they were first produced. Not all of them beat inflation, and of those that did, not all beat the S&P index (and this is what you should really look at... your alternative investment in the money isn't a vehicle to beat inflation... it is a low cost/fee index fund that matches the S&P 500, or a bond index fund). It is hard to know, before the fact, which guns will appreciate. Furthermore, "controversial" guns like MSRs could be difficult/impossible to sell down the line (However, if laws were passed that "banned" MSRs, you could make a killing selling your collection before the ban).

Consider the Colt Python vs the Ruger Security Six. Was the Colt a better gun? Sure. Is it so much better that it commands a 2x-3x premium for a NIB model today over the Ruger? Not in my opinion. Why the disparity in the market then? Brand name and quantity of production has a lot to do with it. If you had bought 10 rugers 40 years ago and put them away, would you have beat the S&P index? I'm not so sure.

Anyway, just some food for thought. Investing in guns can be a lot of fun because you get to buy lots of very cool firearms. If you want to spend your money like that, then go for it, but don't do so thinking you are going to get a huge return down the line. Here are some strategies/tactics:

-- Set up a schedule to scour the internet as well as local gun stores & pawn shops to find good deals on used, good condition firearms. You might even look into setting up a table at a local gun show. Save up that $1500 a month for a few months, and offer to buy firearms cash. Go into it knowing that you can walk away from any deal, and buy the guns at a good enough price to make it easy to resell. Consider age, condition, and rarity, and don't pay more than 50%-70% of its real value. You may want to specialize in a few different makes of firearms at first so you can really learn what they are worth out on the market. Consider that I've seen guns at my local gun shop and a gun shows that sit in cases for YEARS. You need to buy them at the right price so you can price them to sell without losing money.

-- If you want to collect new guns, then buy nice quality guns from well known manufacturers. Buy two at a time, one for yourself and one for your collection to resell down the line. Shoot your gun, but keep it well maintained and in excellent condition. Down the line you will have one that is brand new in box, and another used gun in good shape that can be resold as well.

-- Consider getting an FFL, or teaming up with a friend with an FFL. You don't need one for the buying, but you will likely need one for the selling down the line. You won't want to sell your collection to a dealer.

Best of luck, and have fun.

The possibility of legislation outlawing/grandfathering is relatively high, which (I would assume) means supply steadily drops while demand remains constant.

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A state recently didn't allow grandfathering.. When they do that your sitting on a pile of rubble.
If you want to invest 100+ year old guns are probably the only thing that are making money other than some odd balls.
Will this panic bubble repeat? Doubtfull since everyone that could ran out and paid the price of admission. Maybe the next generation will perpetuate it? I certainly wouldn't hedge my bets though.

I do not consider my guns as financial investments, but looking at the performance of my 401k over the past few years, perhaps I should reconsider.
However, it is very difficult for me to take a portion of my 401k and go out to play with it for a day, put it back in the bank and be reasonably confident that at worst, I could someday recoup what I originally paid for it. So I do consider guns an investment in my joy, personal satisfaction with life and emotional well-being

Humans have a big problem with windfalls. When we see someone enjoying a huge reward for a relatively simple act, there is something in our brain that lights up and screams, "do that!" Unfortunately, there are plenty of people who are willing to exploit that flaw.

Look at all the "commemorative" garbage, from plates to coins, drifting from curio cabinet to drawer to thrift store. Look at all the people feeding money to casinos. Look at that "guy" in NH who "lost his life savings" on a carnival game recently. Look at the lotteries. Look at the recent housing bubble, and all the bubbles that preceded it. None of those would exist if we didn't have wiring in our brain that predisposed us to seeking windfalls.

Some types of investments don't offer much chance of a windfall. A savings account is going to give a known, modest, return. The stock market as a whole is similar over the long haul. Those are the safe investments.

Most people who think about guns as investments are in that windfall-seeking mode. It's much higher risk. It's still an investment...but then again so is buying a lottery ticket.

That's why sensible people will tell you not to invest in guns, even when they are.