Most custom knives are both made and bought with little or no thought given toward being something with investment potential. Collectors collect. Collectors buy what they like, and for many of them, there is no such thing as “investment-grade” knives.
Several years ago, on an internet knife forum, someone asked if custom knives are good investments. The answer from the majority was no. Most of those belonged to the IBWIL (I Buy What I Like) Club. They were quick to point out that mutual funds, stocks, bonds, etc. were better investments. Given their performance in the past couple of years, perhaps an argument can be made for having some investment-grade custom knives in one’s portfolio. Fast forward to today and the market is doing much better. However, so are custom knives. Had you bought with an eye towards investment several years ago. Many of those knives, if sold today would “beat the street.”
I know this will sound obvious, but dealers are not collectors. Dealers are professionals who, in theory, do not get emotional about a purchase. Truth is, that is not 100-percent accurate, as my collection will attest. As someone who has bought and sold custom knives for a living for the last 23 years, I feel I have been an investor for some time now. Regarding any type of investment, the phrase that pays (literally) is: Return On Investment (ROI). This is your net profit…that is to say what you made on the investment after all the expenses have been accounted for. There are five keys to investing with and in custom knives.
1. Due Diligence
Do your homework; learn everything you can before you buy. There is no excuse for not knowing about a maker and his or her knives before you buy. Knife Magazines, Annuals and the Internet are a wealth of information. Perhaps the greatest ally of the collector today is the internet. Searches can provide you with an insight to makers and their knives that can give you a competitive edge with your investing. One caution: A majority of people who participate in online forums do not use their real names. Subsequently, any and all information they offer should be subject to extensive scrutiny. Always check your sources for accuracy.
This is a 5-part blog that will continue on Wed. 6/27 so come by to keep learning about collecting custom knives for investments.