Chill Clinton is a trading card enthusiast and investor who operates an online trading card store.
If the explosive growth of the Pokémon trading card market in 2020 has taught collectors and investors anything, it's that the same passion for and energy around these decorative pieces of card stock that have trailed the property since the late 1990s remains.
The historical performance of the Pokémon brand continuously inspires new investors to enter the market space, hoping to secure their capital in semiliquid collectible assets as hedges against inflation and to hopefully see the value of the cards increase with time.
However, there are several common pitfalls to Pokémon card collecting that new investors often have to learn the hard way: by experiencing them first hand. From falling victim to hype to purchasing counterfeit products, and improperly storing cards, there are so many factors that can quickly eat into the value of your investment.
Fortunately for you, as a seasoned Pokémon trading card investor, I have fallen victim to all of these pitfalls and have compiled a short list to help you understand what to avoid when curating a Pokémon card collection to reduce costs and deliver the best long-term value.
Avoid Hype Cycles
Similar to other assets like stocks, cryptocurrencies, and precious metals, Pokémon cards are not immune to massive hype cycles, during which the market pumps quickly and then tends to downwardly correct just as suddenly.
Since the advent of widely adopted social media platforms like Twitter and Instagram, these hype cycles have tended to occur as a response to highly publicized trades among popular trading card influencers.
Naturally, collectors and investors want to avoid making significant Pokémon card purchases during these periods of increased interest in the market. There are only so many especially premium Pokémon cards in circulation, and many of these cards are owned by a very narrow number of individuals and companies who have few market competitors.
Oftentimes, unfortunately, these influencers engage in highly public sales with above-market price tags, perhaps as a means of artificially inflating the value of the Pokémon market to their benefit.
For example, after popular Youtuber Logan Paul purchased a PSA 10 1st Edition Charizard for $150,000 in October of 2020, other copies of the item proceeded to fetch prices nearing $400,000 by early 2021, representing nearly a ten-fold increase in value over the course of a year.
However, by the end of 2021, the value of the PSA 10 first edition Charizard corrected, breaking well below $300,000.
Of course, very few people will have the capital to invest in these wildly expensive cards. But we can see a similar trend occurred in more accessible premium Pokémon products over the same period.
Take, for example, the PSA 8 Unlimited Charizard from Base Set. Following Paul's October 2020 purchase, the average sale price of this card jumped from about $800 to roughly $2000-$2500 over the course of a month. However, by early 2022, investors could purchase PSA 8 Unlimited Charizards for around $500 to $600.
And even more economy Pokémon assets such as PSA 8 Unlimited Clefairy soared from $50 to nearly $200 between September and November of 2020, before sharply declining to roughly $30-$40 within just a year.
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So although vintage Pokémon cards have shown steady growth in value over the decades, investors should be conservative when choosing to invest during periods in which the value of Pokémon cards multiply over a matter of months.
This phenomenon tends to indicate increased market speculation, where individuals aren't necessarily investing in cards because they think the card is undervalued and intend to hold the card for years, but because they expect to buy and quickly sell the card at a profit.
Generally speaking, this will eventually place the Pokémon market in a state where there are simply more sellers than there are buyers, triggering a steep price decrease as speculators rush to the market to prevent losing too much of their initial investment.
Don't buy as prices are soaring. Wait until prices stabilize so you aren't in a position where you either need to sell or hold your asset for years in order to simply protect your principal.
Steer Clear From Counterfeit Cards
One of the biggest challenges for new Pokémon card collectors and investors is being able to identify and avoid counterfeit Pokémon products. These items can be sold individually or in sealed Pokémon booster packs, often purchased online from companies either dealing in counterfeit distribution or without the requisite knowledge to identify illegitimate products in their own stock.
If you need information on how to identify counterfeit Pokémon cards, I would encourage you to check out this article I wrote, outlining some simple strategies you can use to ensure you are only purchasing authentic Pokémon cards.
But even the most seasoned professionals can unknowingly purchase counterfeit products, so investors should try to purchase individual cards and products from sellers working with trusted intermediaries that specialize in trading cards, such as TCGPlayer or PWCC.
These sites both offer money-back guarantees as well as free authentication services in instances where there is a disagreement between buyers and sellers regarding the authenticity of a card or sealed product.
Of course, this may not always be an option, so until you develop your eye for catching even the most sophisticated fakes, you should avoid cash deals off of sites like Facebook Marketplace or Craigslist.
If you do happen upon a local deal that interests you, I would encourage you to develop a relationship with other local Pokémon collectors, investors, and dealers so that you can have the product authenticated by multiple sources before making the purchase.
As a Pokémon investor and dealer myself, I am happy to make this service available to my colleagues and customers free of charge, and I have found many of my peers are willing to do the same, so don't be afraid to ask!
Prevent Damage From Improper Storage
Once you've acquired a Pokémon trading card or sealed product, it is critical that you store it correctly in order to maintain its condition long-term. Often times when purchasing "found collections," I will meet individuals who promise me that they kept their Pokémon cards stored in a binder and never took them out for decades. Therefore, they are confused when I tell them that their cards simply aren't in the condition needed to fetch some of the higher sales prices they are seeing online.
Unfortunately, Pokémon cards are extremely difficult to maintain, and simply storing them in the 3x3 plastic portfolio sleeves we all remember having in the late '90s and early 2000s does not prevent signs of long-term wear from developing.
The reason this common early storage method did not work is that novice or former collectors often placed these cards directly into the portfolio. Doing this provides little barrier to the development of moisture and dust, subjects the cards to the effect of acidity in the plastics used by some brands, and also encapsulates the card in a tight holder that applies pressure directly to the sides of the cards, eventually wearing down the edges.
Fortunately, there are a number of storage products that collectors and investors can purchase to prevent the development of wear to the best of their abilities.
To best ensure the long-term quality of your cards, I encourage you to purchase standard-sized, premium individual card sleeves from manufacturers such as Ultra PRO or Dragon Shield and place the cards in those sleeves. Then, take the sleeved card, and place it in a semi-rigid 3x5 top loader plastic sleeve manufactured by companies such as Ultra PRO and Beckett Shield.
These premium card sleeves are made with long-term storage in mind. Rather than directly holding the cards using the edges of the sleeve, the top layer of the sleeve tapers off at the edges, holding the card in place by applying gentle pressure to the front and back faces of the card. The semi-rigid top loaders further help hold the cards in place and prevent creasing and the effect of improper climate, which has a tendency to cause cards to bend over time.
After doing this, you can then confidently store these cards in a long box, specifically designed for trading card storage, or even use an opened Elite Trainer Box, which is perfect for snugly storing cards in top loaders.
As a final note, collectors and investors should always ensure that their cards are stored in an adequate climate. You don't necessarily need to purchase a dehumidifier or any fancy equipment, but cards should never be stored in places that experience extreme changes in temperature or humidity, such as attics, basements, or garages. Doing this can lead to the development of moisture and cause the card stock to bend and lose its quality over the years.
The Final Pitfall!
After reading this article, you will hopefully feel more confident in your decision to begin collecting and investing in Pokémon trading cards should you choose to.
Of course, in this list, I was not able to cover all of the nuanced challenges that you will inevitably encounter if you choose to invest in these collectibles. However, the above points are some of the most common pitfalls that often carry the most devastating consequences for new investors.
Though this is not on the list, the final pitfall I will mention is becoming involved in Pokémon card investing if you do not have a genuine interest in collecting beyond what these cards can deliver in terms of long-term monetary growth.
Ultimately, as semiliquid assets, Pokémon cards are far easier to acquire than they are to sell, and those who do not enjoy the process of collecting and trading these collectibles may never see a return that will justify the labor Pokémon card investing demands.
This being said, if you find yourself yearning for the days when you ventured out to your local bookstore or gaming shop in an unending quest to "catch them all", investing in Pokémon trading cards can be a fun and exciting way to store your money and hopefully watch it grow over the years.
This article is accurate and true to the best of the author’s knowledge. Content is for informational or entertainment purposes only and does not substitute for personal counsel or professional advice in business, financial, legal, or technical matters.