Study: Investing in Legos Will Earn You More Money Than Gold

While some folks might take into account gold, jewellery, artwork, wine, or antiques good investments within the long-term, a brand new examine challenges that notion and presents a novel and extra profitable various: Lego units.

Economists from the Higher School of Economics in Russia have discovered that the market costs of retired Lego units bought on the secondary market develop by a minimum of 11% yearly, which is greater than the common returns supplied by gold, massive shares, bonds, and various investments. For their examine, the authors analyzed the costs of two,322 unopened Lego units from 1987 to 2015 and details about main gross sales and on-line public sale transactions.

The examine can be revealed within the January situation of Research in International Business and Finance.

“We are used to thinking that people buy such items as jewellery, antiques or artworks as an investment,” Victoria Dobrynskaya, an economics and finance professor at HSE and a co-author of the examine, mentioned in a university news article. “However, there are other options, such as collectible toys. Tens of thousands of deals are made on the secondary LEGO market. Even taking into account the small prices of most sets, this is a huge market that is not well-known by traditional investors.”

The researchers supply some causes to elucidate why folks pay large bucks for Legos. A major one often is the small variety of units produced and the restricted quantity of people that wish to promote their Legos after they purchase them. In addition, LEGO has been making Legos since the 1960s and has amassed a legion of nostalgic grownup followers who worth older units.

Before you begin questioning whether or not you have got any Lego units laying round your own home that might be secret treasures, there are some issues you need to know. First off, costs for Lego units on the secondary market, which fluctuate tremendously and vary in returns from between -50% to +600% on an annual foundation, sometimes begin to improve two or three years after a set has been retired. This means you need to think about excessive prices like supply and storage into your funding.

Secondly, the costs of small or very large units will develop quicker than medium-sized units, the researchers discovered. The units that see the most important progress in worth on the secondary market are these associated to well-known buildings, motion pictures, or holidays. As such, it shouldn’t be a shock that a number of the most costly Lego units embrace the Millennium Falcon, the Death Star II, and the Imperial Star Destroyer. Other extremely valued Lego units embrace restricted version units and people given out at promotional occasions.

And lastly, the secondary Lego market is not one thing you may leap into simply for those who’re not a fan, Dobrynskaya mentioned. There are lots of Lego units on the market, and it takes a real fan to research the market and make a wager on a set that may be value much more sometime.