Firearms as a good investment

[Joe Demko]

Only if you can sell them to somebody who wants them at a price that would show you that return. See, it has been my experience that, during financial downturns, it's harder rather than easier to sell guns. So, unless you are talking about some really, truly rare and valuable firearms that a rich collector would snap up the moment they hit the market, I can't agree. Stuff that the average gun guy buys, you're going to be left holding because the average gun guy ain't rich. Bad times for him means worrying about paying bills, worrying about getting laid off, and stuff like that. He isn't in the market for that Savage 99 or that Remington Rand .45 or that Norinco AK.

 

[4v50 Gary]

I'd hate to think of guns as an investment. You can make money, especially with collectible guns. However, your run of the mill pistol, shotgun or rifle won't fetch much on the market. They come into play should TSHTF. At that point, they're better than gold.

 

[velocette]

Gentlemen;
You are not hearing my argument. I do not think that firearms are a good investment as compared to stocks, bonds etc. What I am saying is that when compared to other TOYS that we play with and enjoy, they can be a good investment. Most of the firearms I own are worth at least as much as I paid for them if not more, and in many cases much more. However, I have shot them, hunted with them, competed with them, reloaded for them, carried them and on and on. There is significant value there.
Where else can I buy a $250.00 pistol, shoot it and enjoy it for 10 years and find that its value is now $500.00 or more. (Browning Hi-Power .40 S&W)
This is not typical nor an average, but not out of the ordinary. Admittedly, one must select the firearms carefully, but you shoot your "investment" and not lose much money and sometimes can actually come out ahead.

Roger

 

[Joe Demko]

Look, I hate to sound like I'm arguing obliquely to your point, but they aren't worth anything ($) until you find somebody who wants to buy them. Has anybody actually offered you $500 for the Browning? The difficulty of easily and quickly liquidating firearms other than the truly rare collectors pieces still mitigates against them even as casual investments. For stuff like a run of the mill handgun, it doesn't take too much in terms of auction fees or mileage running to gun shows or fed ex/ups shipping fees to devour your profit.

 

[John Wayne]

Guns can certainly be an investment, albeit maybe not one you'd want to rely on to retire.

If you have an average interest in firearms as a hobby, you can buy a few quality guns, treat them well, and probably sell them down the road for roughly what you paid for them. If you bought them used, so much the better. They may also become highly desirable or collectable, in which case their value will improve significantly. Even if they don't though, material and production costs are sure to increase and new guns will cost more in the future than what they cost you now.

What else can you use frequently, enjoy as a hobby, appreciate for its historical value, and sell for the price you originally paid? RC cars? Baseball cards? Stamps? Coins (maybe)? Not much.

 

[oneounceload]

When I see these threads with the word "investment" in them, I thunk someone is trying to make a living off of buying guns, holding onto them for 20 years and then selling them thinking they made a profit.

Sorry balrog, my investments have gone UP the last few years, even in this economy

Buying guns because you want them to shoot and then sell WAY down the road for at least what you paid for them will work only due to inflation, is NOT my idea of investment. I know many folks who own high-end shotguns like Kreighoff - they can sell their 10 year old guns for a "profit" over what they paid, but not for what their stock would have brought.

In any event, buy the most expensive guns you can, their return is the highest

 

[HGUNHNTR]

My investments have also gone up, many stocks have been on sale especially in 2008-09 What a fantastic time to buy and make some extra $$$

The evil old SKF has been a nice returner as well.

Buying guns should be a source of stress relief, not part of some lame attempt at portfolio diversification. But if thats what it takes to convince your wife to give you enough leash to buy guns, then so be it.

 

[murdoc rose]

In the most basic seance of an investment then yes. Id rather have a safe full of guns than a pile of stocks or a gold brick. As far as buying guns solely to make money there not the best option but as a useful tool that will retain and hopefully gain value as well as provide entertainment its one of the best things you can put money into.

 

[Zundfolge]

Firearms are like any other form of collectible (like art, antiques, comic books, sports cars, etc).

If you really know the market and you get a little lucky you can make some money if you time your buying and selling just right.

Like these other collectibles their values fluctuate ... and sometimes wildly (for an example a Ferrari Daytona Spyder that cost $25k in 1972 would sell for close to two million in 1987 but is now only worth about 300k).

Not a LOT of guns are simple "buy and hold" investments. But some guns (like vintage Colt SAAs, Colt Pythons and Singer 1911s) will likely always go up in value. But then again like the disclaimers on the investment ads say; Past performance is no guarantee of future returns.


Of course like gold, firearms can be a good TEOTWAWKI insurance.

 

[CraigC]

While they hold their value more than most other things we spend money on, with rare exception guns are a very poor investment if your intent is profit.

As far as the stock market, well, I invested a little last year and more than doubled my money in just a couple months. If I had kept what I had, it would now be worth 12 times what I paid for it.

 

[HGM22]

I'm not sure about sinking serious cash into firearms as a (long term?) investment, but some of them do appreciate. For example, about 5 years ago I nearly bought a K31 for $90 but passed on it (still kick myself to this day). If I had bought it I'd now have a $280+ gun. I'm not sure what the inflation rate is, but seems to me that tripling my money in 5 years beats it! Only problem is, it'd take a lot of K31s to make a serious investment (probably would want to get an FFL if dealing with that many).

As far as liquidity goes, could be an issue if you live in a remote area, but otherwise probably not so bad. And if liquidity is really that big of an issue, then a lot of other investment options aren't going to work either.

 

[rocky branch]

Value is relative. to what you can get.
A lot of collectables are on the market and not selling well these days.
The looming legal issues with firarms is a big deal.
As mentioned, one fell stroke of the pen and your investment is worthless.
A good investment to me is something I can turn on a whim.
I buy guns because I like 'em.

 

[CWL]

I think that all my firearms are worth more than I paid for them, but them again I started back in the 1980's... Then again, none of my Custom guns are worth close to what I put into them.

I don't consider firearms an investment because you need to be willing to sell an investment before you can realize your profit or loss.

 

[PAPACHUCK]

As previously mentioned, firearms are a great investment in fun.

Cars aren't, for the most part, ...definitely not race cars. 4-wheelers aren't, I'm there now. golf clubs aren't, never went there. boats?.... remember the boat owners two best days?

There is a chance, though, that guns and ammo could be the equivalent of gold and silver if the financial world were to crash. Hard assets last, beware of paper.

 

[duns]

Thanks to the OP for a very thought provoking post.

I think it is true that guns depreciate slowly and often even appreciate slightly. But the cost of ammo will far outweigh the cost of the gun for most people. So moderate losses/gains on the price of the gun itself are neither here nor there.

Of course, it would be nice and to buy a gun for $500 and sell it in 5 years for $5,000 or $15,000 or $500,000 but how do you figure out which gun that is unless you have the gift of prophesy? I think for most people you are probably better off sinking your spare cash into paying off your mortgage, then at least you have somewhere to live in your old age. I would make this same comment in respect to speculating in any other commodity.

 

[22-rimfire]

Thinking of firearms as investments is only a rationale to buy more guns for most people. Most loose money when they sell their firearm relative to any reasonable rate of return % placed on the initial investment.

For the most part, gun dealers have it right. You need to buy at about 50-60% of market value to make any money at all on firearms with any regularity or predictablity. Plus you have to be willing to sell them to actually reap any gain which many of us have problems doing.

Generally, buying guns as an investment is speculating and a high risk "investment". However, it never stopped me.

 

[Paul Kersey]

The right gun collection can be better than gold.

Yes it can.

 

[GRIZ22]

Firearms can be a good investment. There are two major problems with it as there is with other collectables be they guns, classic cars, or works of art.

The first is liquidity. If you want to cash in a gun you have to find a buyer first. That may not be easy. The value of the gun can vary widely due to many factors.

The second is during hard times the prices drop due the flood on the market. Even if its a one of a kind you will get less for it during hard times.

Precious metals is the safest, most liquid, and surest bet. Jeff Cooper once explained inflation by saying a $20 gold piece at the turn of the century would buy a new colt revolver or a good man's suit. That $20 gold piece will still buy the same today but not $20 in paper money. That $70 an ounce gold from the early 70s is worth a lot more than that $200 Python from the same era.

 

[SSN Vet]

I once had a navy buddy of mine show off a $3,000 diamond ring that he bought his wife. The guy went on and on about what a good "investment" it was.

For some reason, I thought a lot about this and actually came up with my own personal definition for the word "investment".

An investment is something you buy today, which you plan to sell at some point in the future for a profit.

Somehow, I couldn't picture my buddy prying that ring off his wife's finger to sell it.

My Dad had a late life career change and worked his last 6 years as a stock broker and one of the many little quips I've heard him say (many times ) is "don't fall in love with your stocks", as he saw many a little old lady ride their GE or GM shares up, up, up... only to ride them down, down, down, realizing a great loss, because they couldn't dream of ever parting with their "security blanket".

So if I was to purchase a firearm as an investment, I would make sure it was something that I had absolutely no personal affinity for, and would not hesitate one second to sell when I was offered a good price.

 

[cartod]

I have been "collecting" since I was about 23 yrs old. I only hold on to Winchesters, Brownings and and Colts that meet my crteria for rarity and condition.

For those who dont think that you can use guns as a valuable part of a portfolio, you should probably stick to collecting something else. The key is to buy the right gun, at the right price (or a decent price).

To those of you who call it speculating, Show me a rare Colt or Winchester that has had the market pulled out from under it.

This would make someone a nice investment as long as it doesnt go above __________? ...http://v2.gunbroker.com/Auction/ViewItem.asp?Item=183413581

 

[Justin]

Unless you're buying rare guns with high collector values, guns aren't a good investment.

At best, they will keep track with inflation, and that's working from the assumption that you keep them NIB, and are able to find a buyer at a later date.

If you're interested in hedging against inflation, you're better off sticking with precious metals. If you want to make actual investments, look into mutual funds and talk with a financial adviser.

 

[Chemistry Guy]

Guns are more of a hedge or an insurance than in investment. I live fairly frugally, and as long as I don't have a horrible accident or get a debilitating disease ( that's what insurance is for), I don't think it is very likely that my family's ability to live a modest lifestyle will be compromised. The other extreme circumstances that could disrupt our lives... well that is what the guns are for.

 

[cartod]

My investments have also gone up, many stocks have been on sale especially in 2008-09 What a fantastic time to buy and make some extra $$$

The evil old SKF has been a nice returner as well.

Buying guns should be a source of stress relief, not part of some lame attempt at portfolio diversification. But if thats what it takes to convince your wife to give you enough leash to buy guns, then so be it.

Lame attempt? Nothing lame about these 30 9410 case colored guns I paid $350 each for 4 years ago. I let one go on auction about 6 mos ago and it fetched $1700. so, Im gonna hang on to them a little longer if thats OK. I will let them all go in another 10 years or so, and since they only made 500 I am bettin they will do just fine.

I wont even tell you what I paid for some of my Pre war Winnys, and how they continually out perform the market! Stick to your lame work, and I will stick to mine!

 

[killchain]

Gold went from $ 35.00 an ounce in the seventies when restriction on ownership to over $1200.00 in 2010. Example: If I bought an ounce of gold in the 1970's for the price at the time of derugulation $35.00 per ounce and sold it today at $1200.00 that is a 3, 328% profit. Is there a gun sale to compare????

You're forgetting the magic of inflation.

That $1,200 return you're talking about has been inflated by the market.

Not to say it isn't an impressive return! But that 3,328% number you quoted is incorrect.

Gold has fluctuated and dropped, especially in the 70's and 80's when the economy was better. Gold has really only picked up since the dot.com bust.

See, the physical gold is what you trade for dollars, aka "market worth." The gold is only worth what the buyer will pay. Just because you shove a pound of gold into my face and say "PAY ME $16,310.37!" doesn't mean I'm going to.

I might pay that much for 20,000 rounds of .223 Rem if the world ends... but in that case you wouldn't want my greenbacks.

In the bitter end, the only currencies are going to be ramen, rifles and rounds.

 

[Joe Demko]

If you're going to hoard ramen, at least get the good stuff from the Asian grocery stores. It doesn't cost significantly more and comes in much more interesting flavors than what you can find at Piggly Wiggly.