LEGO Set Investing - 9 Factors to Consider
When you were snapping LEGO pieces together at seven years old, you probably weren’t thinking about their potential value as long-term investment strategies — unless you happened to be the exceptionally gifted kid of professional investors and asked too many questions of your parents.
But the LEGO set has emerged as legitimate vehicles for investing. With the wide, growing variety of LEGO sets in the marketplace, some are going to have more value than others. Here are a few aspects that drive the value of LEGO sets and should always play a role when you’re deciding which ones to invest in.
- Diversity
Wall Street investors always tell you that a diverse portfolio with multiple holdings in companies of different sectors, prices, and sizes is best positioned to make a profit.
Believe it or not, it’s no different with LEGO investing. It’s always worth it to have a healthy balance of top-line sellers, classically popular sets, and rarities or exclusives. You’ll always have some sets do better than others. The key is building a good mix and managing it so winners outnumber losers.
- Quality
This advice goes without saying, but the condition and caliber of a LEGO set go a long way in establishing its value. Investors on the resale market place a high premium on quality, almost as much as rarity, market demand, and exclusivity.
Old, “vintage” LEGOs are especially susceptible to quality issues. Few basic LEGO sets produced before 1999 have any value on the market, but those that do are still in immaculate condition.
There’s also a purity element to consider. Some LEGO sets on the market contain pieces that aren’t real LEGOs; fakes are usually detectable by differences in color, size, and gloss.
- Retirement Rumblings
Nothing stirs the LEGO set market like rumors of upcoming retirements of current product lines. Sales of the Batman Tumbler set exploded when news of its impending retirement started to swirl, with many investors ordering as many as 10 or 20 sets.
Several news sites, including Wolf Of Bricks, point out LEGO sets that are due to retire soon. Many sources publish monthly lists of upcoming LEGO retirements and can be especially useful guides for picking sets in which to invest.
- Theme
The theme or branding of a LEGO set confers a lot about its future market value. This reality is especially true for sets with franchise themes like Star Wars, Ninjago, Avengers, Harry Potter, and Lord of the Rings. Such sets are usually priced higher than other LEGO sets due to licensing fees.
The highest-priced LEGO set, the Star Wars Millennium Falcon, is a testament to the enduring value of that franchise. Minifigures and characters in such franchises — Star Wars’ Chewbacca figures, for example — can also be valuable.
Hardcore collectors also prize original LEGO creations like the Taj Mahal and the Statue of Liberty. Themed sets like LEGO Architecture, City, and Technic are valued for their intricacy and educational aspects and are simply reflections of the brand’s high quality.
- Exclusivity
The exclusivity of a certain LEGO set or piece plays a big part in evaluating its future value. You can assess exclusivity in several ways.
One is retailer exclusivity. LEGO often partners with a specific retailer to sell sets only through them. For example, LEGO only sells its Mandalorian Razor Crest set on Amazon and the online LEGO store. That infers a certain value based on its exclusivity, though some LEGO partners are more valuable than others.
Another indicator of a LEGO set’s exclusivity is its status as being “hard to find.” These can be sets that were originally limited in production or are close to retirement. For example, a set of LEGOs that were only given out as gifts at a company Christmas party and never released to the general public may be extremely valuable.
There’s no real middle ground with exclusivity when it comes to LEGO sets. It either plays a major part in determining its value or none at all.
Keep in mind that some LEGO sets had limited production runs for a good reason: They were massive flops. Try as you might, you won’t get top dollar for a 2002 Galidor set, widely regarded as one of the biggest LEGO failures of all time.
- Shelf Life
Some LEGO sets may be extremely valuable even if they’re not exclusive or headed toward retirement. Investors may buy hundreds of sets of a current LEGO title that’s widely available simply because they represent solid investments that will be in demand later on.
It’s important to be judicious in evaluating these sets’ shelf life, though. Multiple copies of a certain set sitting on the shelf for years represent cash that’s not being made. This lack of liquidity makes investing in other LEGO sets difficult at best — if you can’t free up cash by unloading sets, you can’t spend it on high-value investment opportunities.
- History
Past popularity and profitability of a given LEGO set are important factors to consider. Some series are perennial favorites — Star Wars sets have always been historically popular and seemingly always will.
This popularity is especially the case with new sets in long-running series. Not every theme in LEGO history has been a smashing success. While there may be future interest in a Harry Potter or Simpson’s revival, there probably won’t be for The Lone Ranger or, heaven forbid, Galidor.
- Future Relevancy
Judging a LEGO set’s future value involves some out-of-the-box thinking about real-world events. For example, if NASA announces a plan to send a Rover to Mars in the future, you can expect that Mars-related LEGO sets might be popular and eventually highly collectible.
Taking a distant view of upcoming entertainment or events never hurts.
- Clearance and Discount Sales
It can be extremely enticing to load up on multiple LEGO sets when they’re on sale at half off or more, even if they’re not facing retirement. It may even be a good idea from an investment perspective.
But just like traditional investments, you have to be realistic about risk tolerance. There’s a chance that snapping up LEGO sets at discount sales will result in a surplus with a long shelf life — sets that can’t be resold due to lesser demand. That’s a lost investment. Just be aware and realistic about your expectations.
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