Why I’ll Never Invest In Magic: the Gathering Cards

“MTG Finance” is a popular niche investment community. Basically, participants invest in individual cards or sealed product, particularly cards on the reserve list. These cards have proven to steadily increase in value over the years, some even qualifying an exceptionally good investments. Yet I’ll never invest in Magic cards. Here’s why.

  1. Magic cards can be lost or destroyed easily. This means that an investor must spend additional time, money, and energy into the safe storage and transportation of their collection. Fires, theft, water damage, etc. Theft is particularly significant because many deals occur at conventions, where there is no shortage of potential thieves roaming around. Expect to be enslaved to your collection the entire time.
  2. Magic cards can be counterfeited. This means additional time, money, and energy must go towards grading and inspecting cards before a big sale.
  3. Magic cards have no inherent value. At the end of the day, they are pieces of paper. While Wizards of the Coast does maintain a reserved list, and cards on these list tend to only increase in value over time, WOTC cannot reserve the value of the Magic hobby as a whole. Yes, Magic has done fantastic up to this point, but I am not optimistic about Magic’s future in twenty years, and I would prefer an investment vehicle that has long-term potential.
  4. Magic cards are not a liquid asset. When you want to make a profit on your investment, you have a great deal of work ahead of you in finding a buyer, especially if you have a position in low-value cards. Most collections have to sold in increments, not all at once. This is especially true when you own a particular single in bulk. As you sell it off, not only have you invested a lot of time in these separate sales, but you are likely going to see a price drop as that card becomes more available within the niche collector’s market.

As you can tell, my biggest problem with Magic investing is the hassle involved. What would encourage me to invest in Magic cards is if a mutual fund or investment trust tracked the entire reserve list, but based on my limited knowledge of mutual funds, it appears that this would involve too much regulation and the fees would be exorbitant.

If you enjoy MTG finance, more power to you, but from my perspective, its just a hobby masquerading an investment. When considering sealed product in particular, a good investor could produce the same return in ETFs or stocks in the same time with much less effort. I’m a believer in passive investing through index funds, gold, and crypto, not in active investing, since active investing has historically produced paltry returns when factoring in the time involved.

Some individuals may point to Rudy of Alpha Investments as an example of MTG finance success, but I think this is a mistake. First, Rudy did not obtain his wealth via MTG investing but through working a normal job in finance. Second, MTG finance is probably not his main source of income. He a loyal base on Patreon, a large YouTube channel, and a large MTG store. He’s not a MTG investor, he’s a store owner and content creator who talks about MTG finance.