For portfolios in need of pinch-hitting

Stories abound about tokens of childhood pursuits netting later-life windfalls. Collecting baseball cards is one obsession that’s consistently paid off. And if you play your cards right, you can knock one right out of the park.

Card collecting is a $1-billion-a-year industry supported by nearly one million serious collectors, a half-dozen card manufacturers and more than 100 weekly card shows. But the absence of a dedicated index and reliable historical data make it difficult to establish benchmarks for potential return on investment.

You can follow the trend by tracking the price journey of a much-vaunted Honus Wagner card—one of the first collectibles.

Wagner was a shortstop for the Pittsburgh Pirates, and the first T206 Wagner card, as it’s known to collectors, was issued in 1909. In 1991, it sold for $451,000 to Canadian hockey legend Wayne Gretzky. According to Forbes, in 2008, the card was worth $2.8 million. But in April 2013, the Chicago Sun-Times reported that dealer William Mastro had admitted to doctoring the card.

Major-league investing

Other vintage selections, printed between 1948 and 1969 and in good overall condition, have been shown to increase in value at a greater rate than many stock markets, says Tom Bartsch, editor of Sports Collectors Digest, a publication regarded by fans as the hobby’s bible.

Older, high-grade specimens can cost tens of thousands of dollars and bring greater returns if held.

If you want to begin a collection, modern cards of relatively inexperienced players could be diamonds in the rough. “It usually means grabbing the rookie cards of highly regarded prospects and turning them over once professional success is achieved,” says Bartsch.

“Often, the best time to look for a return is when players reach the major leagues and have early success [before] they regress or get injured.”

Hassle factor

• Cards must be in mint or near-mint condition to be valuable.
• Care, storage and insurance require time and money.
• Insurance costs may not be recouped by sale.
• Due to size and material, cards can be accidentally thrown out.
• Card value hinges on athlete reputation.

Card values are first and foremost based on condition. Everything matters, from scratches and bent corners to the centering of the photos.

Bartsch suggests capping your card investment at 25%.

“If you have a $500,000 to $1-million collection, you are in the very high-end of the baseball card collecting category,” he says. “This is a niche area of investing with a limited pool of other like-minded individuals.”

When cashing out, use a reputable seller because “the average card shop dealer will pay a fraction of what cards are worth,” says Bartsch.

Alternatively, you can trade on such websites as ebay.com, beckett.com and checkoutmycards.com.

Another website, thepit.com, calls itself a “sports stock exchange,” where investors can buy a piece of a sports star “using their most popular cards as shares.” The site has a “stock” ticker and many charts, including most active trades and week’s top gainers.

Most sought-after baseball cards

• 1909 T206 Honus Wagner
• 1909–11 T206 Eddie Plank
• 1914 Boston Garter Joe Jackson
• 1952 Topps Mickey Mantle
• 1914 Baltimore News Babe Ruth rookie
• Most Hall of Famers’ rookie cards

Source: Tom Bartsch, editor, Sports Collectors Digest

There are no established, long-term benchmarks that record and track card prices relative to the stock market. However, according to research conducted by Sports Collectors Digest, baseball cards annually returned 8.6% on investment from 1981 to 2012, and 1.2% from 1992 to 2012. (These results are based on a series of assumptions and approximations. Real-life experience may be different.)

As baseball’s most quotable character, Yogi Berra, once said, “In theory there is no difference between theory and practice. In practice there is.”