How to invest

[mahler24]

I have a question........Im the kind of invester who doesnt buy more than 2 or 3 of 1 set unless its dramatically reduced, so usually im buying bits of everything that i think will go up in price. Is this a good strategy?? Or should i be buying bulk amounts of 1 set? In the past month or 2 i have started buying just 2 of every set......And just sets that i like.......but i cant help but think that i should buy some sets in bulk??

[cflannagan]

I have a question........Im the kind of invester who doesnt buy more than 2 or 3 of 1 set unless its dramatically reduced,

so usually im buying bits of everything that i think will go up in price.

Is this a good strategy?? Or should i be buying bulk amounts of 1 set?

In the past month or 2 i have started buying just 2 of every set......And just sets that i like.......but i cant help but think that i should buy some sets in bulk??

Don't buy bulk of just one set.. as your gut instinct is telling you, you should be more diversified than counting on success of one set.

I also buy only sets I like, because chances are, others will like it too. Easy rule of thumb to follow for me who don't have time to personally research in every set to see whether it has potential or not.

[kfrack5]

For me personally I'm not buying a bunch of any one set yet. I don't feel like I'm knowledgeable enough to do it that way at this time. If it is a smaller set i.e $25 or less I may buy up to 4 of them if I think they have potential to be a good investment. For everything else though I am sticking with two at the most and only buying ones that I like. That's kind of my rule of thumb I've decided on until I get more knowledge about how everything works and until I can be sure I can handle the selling part and make money. Just my two cents, hopefully it's helpful in making your decision.

[Talon]

I have a question

[redeemed763]

I personally kinda have to buy 5 or 6 of most sets because I usually want to sell the minifigs from one, combine it with another complete set to round out the build with its minifigs. Then I need two more to justify the purchase of the first two and recoup their cost, then I like one or two to tuck away for long term, at least 5 years away.

[azalon]

You can buy bulk of certain sets, and over the course of a period of time your inventory will be diversified. What I mean is, say you have $500 per month that you wish to use for buying Lego sets. You might buy 3 Grand Emporium sets, and the same for the next month. Then switch to a different set. It's highly unlikely anyone would continue to buy the same sets every month. I would not mind sitting on 10+ GE sets. So there's not any real need to feel that you have to diversify each time you make a big purchase. There could be a set that Lego has finally listed as retiring soon and you want to get as many of them as you can. Go for it! But only if it's something you objectively feel will be a good investment down the road. Do some research on your own. Do the modular buildings show a pattern? Want to only invest in Castle or Kingdom sets? Only large Star Wars ships? Only sets that are minifig heavy? Find what you think will work--and why--and buy it. There's a bit too much focus on people telling others to be sure to diversify. Diversification will happen on it's natural cycle of buying sets. Even if someone wanted to only buy Chima sets, they would have to buy a different line when Chima is retired. If you could predict which Town/City sets are profitable and wanted to stick to that line, go ahead. Buying from places like Amazon will force you to buy different lines of sets because of their limitations--if you only use a single account. And unless you are on a very limited budget most people would buy from different lines of sets. Some keep saying to buy what you like. Sure, that's fine to an extent. But I say buy what you believe will rise in value in the quickest time period. If that happens to be what you like, then it's a bonus )

[cflannagan]

azalon Er, IMHO, one absolutely has to diversify if one wants to be serious about investing into LEGO sets. To use your example, buying 100% of one's sets from a theme (ie: Chima) means he is locked in to that theme for possibly 2 years, maybe more. Then you say "it comes naturally, when Chima theme is retired, one would buy into another theme" - what happens if that theme happens to tank as hard as Chima? There's also people saying LEGO market could see a serious correction after Xmas 2013. Yes it's speculation, but one has to think carefully - if LEGO market tanks tomorrow and everything is worthless, which sets would I rather have in my collection? Thats how I base my buying decisions - I buy sets that I like. And I have a wide variety in themes. I would feel downright horrible if I have 100% of my money invested into Chima because it is stubborn about not retiring, and then the entire market, or Chima theme, tanks. It is impossible to predict which sets will "rise value in the quickest time period" - if we all could do that, we all would be rich. Therefore, without this foresight, I default to the "buy what I like" rule of thumb. Not a rule of thumb I say is for everyone, but it's a really simple one enough for me to follow. It keeps me sane when making buying decisions.

[comicblast]

@mahler24- Diversification is one of the keys that many investors use, BUT if you spread yourself too thin, you may have some regrets in the future. For example: If your gut tells you that the SW SSD will do very nicely after EOL, then buy maybe 3. If you stick to buying one or two, and in the end get average performing sets, you may wish that you had followed your gut. I would not buy in bulk, mainly because it looks like you still have many questions, but I would buy more than 2-3. Maybe 5-6 of sets under $50 that you think will do well. Also, not all sets should be bought in 5+ lots. Some that you aren't sure of, or don't have a strong faith in, should not take up shelf space in your house. A lot of times, your gut will be correct.

[redeemed763]

By the way, we all have different ideas of what "diversified" means, there are plenty of people on here who consider 10-20 imperial shuttles to be not very many, but 40-50 is a lot. Personally, I wouldn't buy less than 3 of most sets as long as you have the means and can acquire them, if I were to have 10 of a given set, I would have to make a pretty strong case for wanting that many. After all, I don't see myself being happy with sitting down and building my 50th Queen Anne's revenge in 10 years, I'd much rather keep 10 different sets and 5 of each. On the other hand, from a business standpoint, it is much better to have 60+ Imperial Shuttles rather than have that 12k spread out over 50 different sets, when it comes to selling them, the Imperial shuttles will be a fairly easy and highly profitable passive selling experience.

I'm sure most of you know why I couldn't get a certain picture of 60+ Imperial Shuttles out of my head when thinking of an example to use

[comicblast]

:P I would love to have even 5 Imperial Shuttles!

[azalon]

azalon

Er, IMHO, one absolutely has to diversify if one wants to be serious about investing into LEGO sets.

To use your example, buying 100% of one's sets from a theme (ie: Chima) means he is locked in to that theme for possibly 2 years, maybe more. Then you say "it comes naturally, when Chima theme is retired, one would buy into another theme" - what happens if that theme happens to tank as hard as Chima?

There's also people saying LEGO market could see a serious correction after Xmas 2013. Yes it's speculation, but one has to think carefully - if LEGO market tanks tomorrow and everything is worthless, which sets would I rather have in my collection? Thats how I base my buying decisions - I buy sets that I like. And I have a wide variety in themes.

I would feel downright horrible if I have 100% of my money invested into Chima because it is stubborn about not retiring, and then the entire market, or Chima theme, tanks.

It is impossible to predict which sets will "rise value in the quickest time period" - if we all could do that, we all would be rich. Therefore, without this foresight, I default to the "buy what I like" rule of thumb. Not a rule of thumb I say is for everyone, but it's a really simple one enough for me to follow. It keeps me sane when making buying decisions.

Then a person's research should tell them at that point to not buy certain themes or to make more educated choices

You could put all your money into modulars, but is that diversifying? All your money is in City/Town large building sets. And yet it should prove to be a solid investment over time. What about Star Wars? There's a ton of SW sets to be had, and they fall into different criteria. But if you bought only Star Wars sets, are you diversifying?

What's awesome about this site is that you can study the difference between Home One Calamari and Venator and see--and study the differences.

To me, to NOT diversify would mean to just pick one set and sink all your money into that set until it's no longer available at a reasonable price. That could work--although each set would need a buyer, and that's sometimes a problem in itself. But to diversify is just going to come naturally as different sets are made available, different sets retire, different sets go on sale, etc. Some purchases will be good, others not so good.

In the end, I'd rather have two Tower Bridges than ten different $50 sets over 5-10 different themes. I'd rather my odds be 50% (it either will or it won't heh) for a set taking off in value than spread around. The odds of going 10 for 10 on each set being a winner is lower if done wrong.

Diversification will happen over time without worrying about it.