There are many ways to make money, and diversifying your portfolio with sports and trading cards could be a smart idea. While most people may not want to invest all their money in niche investments like these, it can make sense to allocate a portion of your portfolio to these types of alternative investments. 

Plus, investing in trading cards or sports memorabilia can provide a sense of enjoyment, especially if you’re a true sports fan.

Here's what you need to know about investing in sports and trading cards!

Investing By Collecting ‘Stuff’

When most people think about investing, they will usually think about investing in the stock market. This could be in an IRA, a 401k, or a taxable brokerage account. Besides stocks and bonds, other common forms of investment may include: 

• Real estate
• Cryptocurrency
• Precious metals 
• Whole life insurance

It has only been recently that investing in "stuff" has started to gain in popularity. Sports cards, other trading cards, art and coins were traditionally not popular investments. 

One reason is that it was historically difficult for individual investors to properly value these types of investment. Another reason that these were considered hobbies is that the market for these investments has traditionally been fairly illiquid. That can make it hard to get a fair price for your collection when you're ready to sell.

How Much Are My Baseball Cards Worth?

Before we talk about how to invest in sports and trading cards or whether or not it's a good idea, let's first discuss the elephant in the room. 

If you grew up in the 1980s or 1990s, you may have a mountain of baseball cards that have possibly been in your attic for years. Or, you might have a collection inherited from your dad, grandpa or other relative. 

You might think that you are sitting on a veritable goldmine, but the fact of the matter is that most baseball and other sports cards from the 1980s and 1990s are just about worthless. 

How to Invest in Sports or Trading Cards

If you're interested in investing in sports or trading cards, there are two main ways that you can invest. You can look at short-term sports card investing or long-term sports card investing. This is similar to investing in the stock market and the difference between a long-term buy and hold strategy as compared to day trading.

With short-term investing in sports cards or trading cards, you might buy individual cards of players that you think will do well over the course of the upcoming season. Then, you can hopefully sell the card for a profit at the end of the season. 

With long-term investing in sports cards or trading cards, you buy cards that you think will appreciate in value, but hold on to them for several years or longer.

Investing in Sports Cards With Collectable or Rally Rd

Another option to invest in sports cards is through companies like Collectable or Rally Rd. 

Both Collectable and Rally allows you to invest in sports memorabilia by converting it to fractional ownership. The way it works is that one of these companies will own a piece of memorabilia, like a Lebron James rookie card. 

If the card is appraised at $1 million, they might offer 100,000 shares at $10 each. You can purchase a $10 share, and if the total price of the collectible increases, the value of your share goes up proportionally.

With a fractional share of ownership, you won't get to display the card on your wall, but it can be a great way to capture appreciation while limiting your risk. While Collectable focuses mostly on sports memorabilia, Rally also offers other forms of collectibles including comic books, art, action figures and more. 

Should You Invest in Sports and Trading Cards?

As with most investments, deciding whether or not to invest in sports and trading cards depends on your interests and risk tolerance. Many people who invest in sports cards do so out of a combination of nostalgia and trying to make money. 

As with most investments, in order to make money consistently, you'll need to put in the time and energy to understand which cards might be profitable.

If you want to get started investing in sports and trading cards, it's a good idea to set a budget of a small percentage of your overall net worth, and see how it goes. If you find that you have a system that picks winning investments, gradually increase your investment. Following a plan like this can help ensure you're not running the risk of submarining your entire retirement if your memorabilia collection doesn't do as well as you hoped.