Guns as investments?

Guns as an investment

This has been discussed many time on this forum over the years.

I'd say guns are a very good investment. BUT I'm probably not looking at it the same way you might.

If you are looking for something to invest in, to increase your wealth, guns are low on the list. The other traditional methods (precious metals, stocks, etc.) provide better returns, almost invariably.

If one plans to buy a number of guns now, and sell them later down the road to increase your wealth, odds are VERY high you will be disappointed.

In that regard, guns are not a good investment.

BUT, looked at it the other way, guns are a good investment of your money, because they hold utility, and therefore, value, better than most other commercial items.

And thanks to the collectors market, many specific guns are ahead of the general curve, but that's a specific situation, that should not be applied as a general thing. The Luger bought in 1957 for $30 will bring a lot more money today, AND a lot more than the value today of that $30 in 1957 A different gun, one not sought by collectors, bought at the same time, for the same amount will also bring a lot more money, in numbers of dollars, today.

But the actually value of those dollars will be close, (if not approximately the same) as the value of the original purchase price, in its own time.

That is "holding its value".

Now, look at another situation. Say 25 years ago, I bought a $200 pump shotgun, and a $200 dot matrix printer. (which, I actually did)

Which one of those, today, would bring me my $200 dollars back? OR, which one of those is likely to come closest to getting me the value today, that my $200 was then?

Not the printer.

And that's just looking at cash/value return. Same situation, which one, shotgun or printer do you think has given me the best "value" (service) since I bought it? Which one has gotten me the most, over the long haul, for the money I put into it?

Same answer. Not the printer.

For what I get, in terms of utility, durability, and the ability to recover a good portion of the value, if/when sold, guns are a very good investment of one's money.

If you are looking for an easy way to make money, look somewhere else, and you'll probably be better off.
 
Many years ago comic books and baseball cards were touted as good 'investments'. I wonder how anybody that bought into that fad is doing today.
 
44 AMP hit an excellent point in a post full of good info. When you say you sold a gun for more than you paid for it, did value actually increase?
A personal example: in 1980 I purchased a Colt AR-15 for $500 from one of the larger gun shops in West-Central PA. Not a great price, but options were more limited back then. In today's dollars, I paid the equivalent of about $1400 or so. A little checking around on the auction sites shows the same type of rifle NIB with asking prices around two grand. Used examples range from $800 up to around $1400.
So, if I had taken it home from the store and just sat on it for the last 34 years, I could possibly sell it and claim I quadrupled my money. A better description, based on changing value of the dollar, is that over 34 years it increased in value by about 30 percent. If I shot it at all, value goes down enough that I may actually have lost on the deal even though I sell it for a higher number of dollars than I paid for it.
MBA's and such obsess over present value of a dollar for a reason.
 
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I am acquiring lots of guns as investments, specifically NFA machine guns. I am diversifying, by adding guns, in addition to my regular portfolio.

Guns as investments have lots of issues.

One major problem with guns as investments is the spread between the bid and asking price. This is not something that can be overlooked, as the spread can really kill your return.

On stocks or bonds, the spread may be pennies. For example, as of this morning, Apple, Inc. stock is $92.24 bid, $92.25 ask. That is a 1 cent spread.

The spread on a gun is at least 10%. I base this 10% number on the commission that Frank Goephert charges to auction a gun. You can always try to sell the gun yourself on subguns and sturmgewehr and save the 10%, but your gun will typically sell for less because buyers are suspicious of a first time seller of a $25,000+ gun. Frank usually gets tops prices on the guns that he auctions, simply because he has a positive history, and people trust him.

Another issue is the transactional cost. Compare a stock trade on TDAmeritrade, which costs $10 one way. When you sell a gun, you have to ship the gun, insure it, and in the case of an NFA gun, seller typically pays the first ATF transfer cost. This can total as much as $400. Even if you aren't dealing with an NFA gun, the transactional cost will still be around $100.

Finally, guns are not a liquid investment. Stock and bonds, and even real estate, can be liquidated relatively quickly and, in the case of stocks and bonds, almost instantaneously. With guns, that is not the case, unless you take the gun to a pawn store, where you will be torn a new one.

BTW, my ultimate gun, which I have told myself that I will one day own is a Winchester 1873 1 of 1000. Pure beauty. I will never sell it, after I buy it. Actually, I will never sell any of my guns. This leads to another problem. Most of the time, with guns as investments, it is usually a disinterested heir who will sell them. Most of us are fooling ourselves into thinking that guns are an investment, and using the investment angle as a way to justify buying the things we love.
 
Say 25 years ago, I bought a $200 pump shotgun, and a $200 dot matrix printer. Which one of those, today, would bring me my $200 dollars back?
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You just haven't waited long enough on the dot matrix printer. Check out what what someone is trying to get for a 1984 Apple Lisa - $3,500:eek:
 
Many years ago comic books and baseball cards were touted as good 'investments'. I wonder how anybody that bought into that fad is doing today.
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I can't retire yet if that tells you anything. :mad:
 
As has been mentioned, guns do hold value well unless you buy the low end stuff.

Think about it. A computer that cost $2000 5 years ago can be bought for $399 today. A car you paid $25,000 for 5 years ago is worth $10,000 today if it still looks and runs good. TVs? A $3000 TV 5 years ago now sells for $800 new today. How about cell phones. You can get a nice gun for the price of a new cell phone today but in 5 years, which one is worth more? You get the picture. You do use these items so I guess you get some satisfaction to justify the cost but you also get to use your guns as well.

Investments? Maybe not but they aren't really depreciating assets, either. It may not go up but if you didn't pay MSRP or bought it gently used you should be able to get your money back and enjoy it in the mean time. You can't do that with many things today.
 
Guns tend to hold their value and appreciate with inflation as a general rule of thumb. The other consumables mentioned earlier are pretty much toss in the trash type items when you upgrade to the next greatest.

Some guns do pretty well as investments. But you have to be willing to sell them and re-invest the money. So many talk about how they regretted selling a particular gun (Colt Pythons and Diamondbacks come to mind), but you can always buy another one just like it for the most part. So, don't get too hung up on a particular gun or something for sale today that you want but can barely afford. The sun shines again tomorrow.

For investments, you need to do your research. Generally the low production models or variations are the ones to buy as investments. But if you don't like guns for the sake of having guns, I'd seek another investment route.
 
Just to expand on ammo:

I believe that ammo IS indeed a very legitimate retirement portfolio, as good as or better than any 401(k), IRA, pension, profit-sharing, or other portfolio.

Ammo is only going to go up, up, up, up, up - way more than guns. It has a very long shelf life, and is moderately easy to store and insure. And unlike cash assets, it's a wonderful, perfect hedge against inflation and market crashes.

The 12,500 round giant barrel of M855 5.56x45 at Academy was $6,500 when it first came out (during the big early '13 scare). It's now been marked down to $5K even ($1,500 off). I guarantee you that if you bought some of those - as many as you can afford, whether that's 3 or 5 or 10 or 20 or 30-- in 15 years, you'll be in high cotton, and in 25 years, you'll probably have doubled its value, if not more.

The reason is that metals are only going to go up as the emerging economies continue to expand - India, China, Brazil, Indonesia, etc... all metals have finite reserves. Copper, lead, steel, tin, aluminum, etc.

PS. Near as I can tell, guns still beat beanie babies.
 
The reason is that metals are only going to go up as the emerging economies continue to expand
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Metals go up. They go down. Hope you didn't invest a bunch of money in copper over the last few years.
 
Ammo, on the other hand, is a decent investment, because, in the worst imaginable situation, it can be the ultimate coin.

We got kind of spoiled in the 80s, and most of the 90s, ammo costs were actually at historic lows (value, not amount of dollars). Then that bubble burst. Prices that essentially had not moved in decades jumped hugely.
A box of .45 Colt one summer cost me $22. The same thing the next summer cost $38!

This was due to several factors, a couple of them being competition from other nations for the raw materials, and a HUGE increase in transportation costs. (gas going from less then $2 to nearly $4 in a single summer -ammo is heavy!)


Then a bit later, we get the global war on terror, and as in any war, military demand absorbs a goodly percentage of production capacity.

And then, on top of all that, the panic buying "bubble" created greater shortages, further driving up prices.

I've got a sealed 1200 rnd case of 7.62mm NATO ammo. Cost $165 when I bought it, back in the "happy time". Not sure what it would bring today, close to $1000 (maybe more?) I've been told. All I know is that I'm saving it as my SHTF stash, because, A) it keeps, and B) I can't afford to replace it! :eek:

Ammo is a good investment, but its only the BEST investment if the absolute worst happens. Look up the parable about the cartridge, the chicken, and the Krugeraand.
 
So many years ago, it was hard for me to save money. It just wasn't earning enough interest in a savings account, and I'm not a sophisticated investor, so the stock market didn't appeal to me.

So, I started buying / selling firearms and did a whole lot better than what a savings account would have done. So much so, it wasn't even close.

But, now as things have become better financially, I put away some money every month, and even though the interest rates suck at an all time high, I feel good about how I'm doing.
 
Metals go up. They go down. Hope you didn't invest a bunch of money in copper over the last few years.
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Yeah, but I'm talking long term. Yes, copper has fallen a lot since its peak in Feb '11, but look at this chart of prices since 1989 (25 years).

It's $3.05 now, and was $1.50 in Jan of '89... that's more than a doubling (100% ROI) - even after the recent fall. As I said - hang on to metal stuff for at least 15 years, and you'll be cooking with butane.

http://www.infomine.com/investment/metal-prices/copper/all/

It's like land - it *always* goes up in the long run.

The only way it could go down over a 15+ year period is if the China economy tanks (i.e. slows to to the growth rate of say, the US or Eurozone economy) - now granted, this IS a possibility, but it's pretty remote. And even if it did, I think it would recover if spread over 25 years no matter what happens.
 
I think the best ammo to invest in, roughly in order, is:

5.56x45 M855
5.56x45 M193
7.62x51 (standard .mil ball)
6.8 SPC (various)
.22lr
.22 mag
7.62x39

The two I plan to start hoarding for retirement are the bolded ones.
 
I must not be living right, or something. There are people that have broke even or profited on every gun they have sold? I have only came out ahead on one gun in my entire life. A friend owed me $30. He was in a bad way, and couldn’t pay me back as promised so he gave me a .22 lever rifle. I sold it for $150. Other than that, I have taken a loss on every other gun I have sold.
 
It also depends on how you "look" at it.

If I buy a gun, online, for $400 then in my head, it cost $400.
Of course, you have shipping and the transfer but, to me, that's like taxes.... real but not part of the sale price but part of the true cost.

So, if I sell it for $400 2 years later but shot it a lot and enjoyed it then, to me, I broke even. The shipping and transfer cover the fun I had. It may not be realistic but what I paid for the item is the value of the item as though I got it from a private party.

So, it depends on how you look at it.
 
This is one of the reasons I'm not a huge fan of most of the budget guns. A lot of cheaper guns will certainly function as well as a top tier gun and often sell for 1/2 the price. The problem is that the $200 budget gun you bought 15 years ago is only worth $150 today. The $400 S&W I bought 15 years ago is now worth $600. Which one really cost more?
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And $16.00 fix-em-up Lee-Enfields I bought in the 90s are now going for over $300.00. I'd say that was a pretty good investment for a "budget" gun.
 
And $16.00 fix-em-up Lee-Enfields I bought in the 90s are now going for over $300.00. I'd say that was a pretty good investment for a "budget" gun.
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That's a great investment if you can buy several thousand dollars worth of them when they're cheap, store them for 20 years or so, and then sell them when the prices go up enough. The logistics involved in purchasing, properly storing and then liquidating several hundred rifles are somewhat complex.

I know what several hundred guns looks like in the real world. A friend of mine's father left him 700 guns when he passed away. He now has several hundred thousand dollars worth of guns. But if he wants the money all at once, he's going to take quite a beating selling them in a large lot. If he wants top dollar, it's going to take him years to liquidate the investment. In the meantime, he's got to store them and keep them secure. He's going to get a lot of money out of them, but he would have been a lot better off if his dad had left him the same value in money, silver, gold, or other more easily stored & more liquid asset.

Can guns be a good investment? Yes, but not for the average person.
 
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