Hand Guns as Hedge against Inflation?
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Justin
Moderator Emeritus
Unless you're buying extremely valuable and hard-to-find collectible firearms, guns do not tend to hold their value.
At best, they will generally keep track with the price of inflation.
At best, they will generally keep track with the price of inflation.
cyclopsshooter
Member
dont look at it as a way to MAKE money- firearms have a certain intrinsic value as a tool, they are fairly inflation proof and would be a safe haven in the wake of a devaluing dollar-
keep it to quality guns of common caliber- 30-30 leverguns, common 30-06 and 223 models... model 10s, 1911s, 38s, 45, 9mm and the such...
widely made firearms with parts availability and interchangeability
after food and shelter, gold, silver, and guns are the way to go
you can invest in stocks, bonds, or whatever- but if the SHTF the extra guns n ammo will be great barter stock to get you through the storm
keep it to quality guns of common caliber- 30-30 leverguns, common 30-06 and 223 models... model 10s, 1911s, 38s, 45, 9mm and the such...
widely made firearms with parts availability and interchangeability
after food and shelter, gold, silver, and guns are the way to go
you can invest in stocks, bonds, or whatever- but if the SHTF the extra guns n ammo will be great barter stock to get you through the storm
Justin
Moderator Emeritus
If your investment plan is built around the end of western civilization as we know it, then you don't have much of an investment plan.
Guns rarely increase in value beyond inflation.
There is politically or legislatively induced spikes or drops, but they do not in general rise above inflation.
Don't count on political spikes induced by antis either. If they cut out grandfathering or the ability to transfer to new owners they drop even further in value rather than going up.
Such was the result of state "assault weapon" bans like in California. Those registered can never be sold or transferred to most people in the state, fortunately there is still other states they can be sold to, or their value would be almost nothing.
Similarly in a post '86 dealer sample of a title 2 firearm the value is less than the same firearm in semi-auto because the people it can be transferred to are so few.
So the one thing that can lead to sharp increases over inflation can also drop the value even lower.
Overall making firearms a limited financial investment. Some hold their value, and increase relative to inflation, but that is normally the extent of it.
There is politically or legislatively induced spikes or drops, but they do not in general rise above inflation.
Don't count on political spikes induced by antis either. If they cut out grandfathering or the ability to transfer to new owners they drop even further in value rather than going up.
Such was the result of state "assault weapon" bans like in California. Those registered can never be sold or transferred to most people in the state, fortunately there is still other states they can be sold to, or their value would be almost nothing.
Similarly in a post '86 dealer sample of a title 2 firearm the value is less than the same firearm in semi-auto because the people it can be transferred to are so few.
So the one thing that can lead to sharp increases over inflation can also drop the value even lower.
Overall making firearms a limited financial investment. Some hold their value, and increase relative to inflation, but that is normally the extent of it.
cyclopsshooter
Member
who said anything about the end of western civilization? shtf could be a 30s style depression ya know
U.S.SFC_RET
Member
Kinda difficult to store an investment in your house. A couple of collectibles but the risk of them being stolen doesn't give me the warm and fuzzies.
Thin of it this way. How liquid can a gun collection be?
Thin of it this way. How liquid can a gun collection be?
Ohio Gun Guy
Member
I actually think it wouldnt be a bad plan money wise, but the volume of firearms needed would run a-foul of a non FFL person.
If you have a FFL and can legally buy & Sell many guns.....go for it.
If you have a FFL and can legally buy & Sell many guns.....go for it.
Right, and house prices rarely decline either. We are in an unusual economic situation at present, and one that no one has really seen before. We owe a tremendous amount of money, and the dollar is backed up only by the promise that we will pay.
I have heard some talking heads with more economics than I suggest that inflation is going to become a huge problem, and that the cost of consumer goods will go way up as a result.
While I generally do not think guns are a good investment, I would not want a large amount of cash piled up either, as I expect the buying power of the cash will decline over the next few years.
ChronoCube
Member
If you're concerned about inflation I think commodities should be the cornerstone of your inflation portfolio. Having firearms to diversify it isn't a bad idea, but I think ammo would be a better choice. You just need to have firearms to use them. 
wally
Member
Series I savings bonds are indexed against inflation, but since the gov says we aren't having any now, they are essentially paying zero interest at the moment.
I think its best to not have all your eggs in one basket. My gun collection is one component of my retirement portfolio and I get great fun out of it in the mean time!
Mostly stocks, bonds, and money markets assuming things will basically hold together ~70%
US savings bonds for if the banks and markets go bust ~20%
Guns and ammo for if the US savings bonds become worthless too. ~10% I think I'd make a great Warlord or maybe I'd start the local "Bartertown" Thunderdome
--wally.
I think its best to not have all your eggs in one basket. My gun collection is one component of my retirement portfolio and I get great fun out of it in the mean time!
Mostly stocks, bonds, and money markets assuming things will basically hold together ~70%
US savings bonds for if the banks and markets go bust ~20%
Guns and ammo for if the US savings bonds become worthless too. ~10% I think I'd make a great Warlord or maybe I'd start the local "Bartertown" Thunderdome
--wally.
rbernie
Contributing Member
Absolutely true, but this misses the mark a wee bit. Any durable good that retains its value across time can be part of (not the sole component of) a solid investment strategy.
Who would have thought that a clapped-out Chevy Nova from 1978 would be selling for four times its purchase price today?
I can say that my gun collection has lost less value over the last two years than has my 401K.
Only if you can predict the future. For instance, when my dad was a young man (1940s-50s) Winchester lever actions were worth $15, Model 70s were under $100, 1903 Springfields were worth $15-$50. Even then, if he had invested $10k in the right firearms (and that would have been a wild guess) he would have barely been ahead of inflation.
And consider, in the mid 1960's, $10k a year was an upper middle class income.
OTOH, if you had waited until 1981 and bought $10k worth of Microsoft stock, you would be in a really fine position now.
And consider, in the mid 1960's, $10k a year was an upper middle class income.
OTOH, if you had waited until 1981 and bought $10k worth of Microsoft stock, you would be in a really fine position now.
All publicly traded things eventually get hit.
Even those items you think "people always will need no matter what the economy is like". This is because a significant portion of the value in those commodities is still speculation, not just its actual value. So when that speculation turns negative even the value of commodities still widely used can tumble. If it tumbles far like in some panics more sell to avoid being late to sell and losing a higher percentage.
So even 'perfectly safe' items always in demand on the global market are subject to speculative gains, and panics.
But as the subject is inflation (I thought it was investment originally, did the title change?), not how to avoid losing money through investment, it certainly is good advice.
Mike OTDP
Member
New guns are a bad investment - you take a hit just by filling out the paperwork (just like a new car).
Anything over 50 years old can be good - especially if you know what you are doing and buy for the long run. For example, mixmaster Garands are running around $800...but the day the CMP runs out, you won't be able to touch one for less than $1500. Right now? I'd look at World War 1 stuff...buy cheap, sell in 2017 for the centennial.
Anything over 50 years old can be good - especially if you know what you are doing and buy for the long run. For example, mixmaster Garands are running around $800...but the day the CMP runs out, you won't be able to touch one for less than $1500. Right now? I'd look at World War 1 stuff...buy cheap, sell in 2017 for the centennial.
billybobjoe
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You should have bought a bunch of Principal stock back in March for $6 a share(a bit better than $25 today). Then maybe gambled with General Growth at 49 cents a share at the same time. Now GGP is six bucks a share. I bought 4,000 shares of Principal and 15,000 shares of GGP. Plus a few hundred shares of Microsoft. Bought Ruger stock last June and should have bought more.
cyclopsshooter
Member
inflation calculator
http://www.westegg.com/inflation/
my dads 70 series gold cup bought new in 1979 $279.00
new O5870CS blue gold cup $860
http://www.gunbroker.com/Auction/ViewItem.aspx?Item=145495081
gun broker like pops 70 series, reserve of $1500 but actual bids up to $1050
http://www.gunbroker.com/Auction/ViewItem.aspx?Item=139357929
http://www.westegg.com/inflation/
my dads 70 series gold cup bought new in 1979 $279.00
new O5870CS blue gold cup $860
http://www.gunbroker.com/Auction/ViewItem.aspx?Item=145495081
gun broker like pops 70 series, reserve of $1500 but actual bids up to $1050
http://www.gunbroker.com/Auction/ViewItem.aspx?Item=139357929
exactly!
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Cyclops has shown the truth - quality firearms do indeed offer a decent hedge against inflation.
Remember, the OP asked for a "hedge against inflation" - he didn't say "beat the market" or make a killing. A "hedge" is just something to offset the financial risk presented by a certain reality. In this case, inflation.
I have Gun bibles and prices going back to WWII and even WWI in some cases. Quality firearms from major makers will generally always offer a near-perfect hedge against inflation. In fact, they offer in so many cases such a perfect hedge against inflation, an interesting b-school or economics paper could be written about it. This is a thing I've marveled at for years.
But that is exactly the measure that is meaningless (two years) - it takes a longer term perspective to prove something a good inflation hedge. 10 to 40 years is a better test. And even in those longer term measures, guns do well against inflation.
The caveat is you have to treat them like an investment - don't cut them to modify them, don't shoot them to pieces, etc.
Now this I have to say has truth in it. If you really want to use them that way as an investment or inflation hedge, buy a gun 1 to 3 years after it sold new from someone who shot it not at all or barely. The gun will still be "mint" and cost 80% of street retail. This is what I do with "new" guns I want to buy. But certain, lower-volume guns you might want you can't get this way, like say a Colt WWI repro.
Remember, the OP asked for a "hedge against inflation" - he didn't say "beat the market" or make a killing. A "hedge" is just something to offset the financial risk presented by a certain reality. In this case, inflation.
I have Gun bibles and prices going back to WWII and even WWI in some cases. Quality firearms from major makers will generally always offer a near-perfect hedge against inflation. In fact, they offer in so many cases such a perfect hedge against inflation, an interesting b-school or economics paper could be written about it. This is a thing I've marveled at for years.
But that is exactly the measure that is meaningless (two years) - it takes a longer term perspective to prove something a good inflation hedge. 10 to 40 years is a better test. And even in those longer term measures, guns do well against inflation.
The caveat is you have to treat them like an investment - don't cut them to modify them, don't shoot them to pieces, etc.
Now this I have to say has truth in it. If you really want to use them that way as an investment or inflation hedge, buy a gun 1 to 3 years after it sold new from someone who shot it not at all or barely. The gun will still be "mint" and cost 80% of street retail. This is what I do with "new" guns I want to buy. But certain, lower-volume guns you might want you can't get this way, like say a Colt WWI repro.
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Fleetwood_Captain
Member
Well if you have the right gun, of course it's value will go up with inflation. You get a used Colt or Smith at a good price, then resist the urge to shoot the piss out of it, and you'll have something will most likely follow the inflation index.
The key here is to have something that EVERYONE would want. Some people like Taurus, some like Para-Ordnance, but everyone loves a classic Colt. And there's no Smith like a "long-action" Smith.
The key here is to have something that EVERYONE would want. Some people like Taurus, some like Para-Ordnance, but everyone loves a classic Colt. And there's no Smith like a "long-action" Smith.
Pre-86 transferable NFA machine guns. There is a very limited supply, a steady and large demand. The demand is not going anywhere (machine guns are not going to stop being fun to shoot, which is why rich people can spend $20k for one) and the supply is finite and dwindling, since more get broken/confiscated/taken off the market every year.
That's be where'd I'd put my money, at least...if I had $20k sitting around, I'd say that buying a fun toy that is fairly certain to increase in value is about as good a deal as a sports car which is all but certain to depreciate in value.
That's be where'd I'd put my money, at least...if I had $20k sitting around, I'd say that buying a fun toy that is fairly certain to increase in value is about as good a deal as a sports car which is all but certain to depreciate in value.
Fleetwood Captain said:
Now I hate to admit this in public, but that's true. I have been trying to keep that secret for years but I guess he's let the cat out of the bag.
I've been trying to "put away" high condition "long action" S&Ws for the last few years. My best is an unfired 1947 M&P, one of the very last long actions. Guns like this will NEVER be made again and the discriminating buyer can still find them cheaply ($350 or less). N frame ones are not cheap, but K and I frame ones are still bargains relative to pre-model prices or model gun prices. The gun-buying public doesn't yet understand the value here. Now don't tell anyone else about this, OK?mlaustin said:
There are multiple reasons to not want to go there as an investment at this moment. The paper work and tax stamp costs are not "high" barriers to entry to ownership, but they are still "barriers to entry" in the economic sense that keep a free market from happening.
Also, the current prices are predicated on the 1986 ban never being reversed. This was a great bet to make in c. 1987 and for years afterwards. But with Heller now "on the books," it's questionable whether that ban will stand the long-term test. The GCA '34 might and the tax stamp, but much less likely the '86 act. So now you have substantial/serious political risk tied up in those guns as a pure investment. Serious "Political risk" is not a risk you can take on in something you view as an inflation hedge or safe investment.
This idea *might* prove a good investment overtime, but is a really bad piece of advice for the OP who was asking for an inflation hedge, not home-run risky investment ideas. I'm guessing you don't actually own a pre-'86 full-auto and realize what a risky investment those are right now. Or perhaps understand the idea of a "hedge" which is to offset risk, not take on more or to try to outperform.
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cyclopsshooter
Member
+1!
got this for $250 a couple of years ago made in 49
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