When I was growing up, Lego sets were my favourite pass time. As a kid, I spent hours upon hours playing with those little building blocks of plastic. Lego sets may look like no more than popular children’s toy, but as an investment, over the past 15 years they have outperformed the stock market, bank accounts and gold!
It turns out that an average set of Lego has increased in value 12% each year since the turn of the millennium, that’s a better return than mainstream investment asset classes including shares. The global share market tumbled last week, essentially wiping out all gains made earlier this year. Turbulent times are predicted in the near future with the uncertainty around the slowdown of the Chinese economy.
In stark contrast, Lego sets kept in pristine condition have rose in value year on year. Even second-hand prices for some specific sets have been rising, especially as they go out of production. Another jaw-dropping fact is that Lego sets released just last year are now selling on Ebay for 36% above their original price!
Many popular old Lego sets are based around blockbuster films such as Starwars or famous landmarks such as the Taj Mahal. The highest percentage rise of a single set of Lego goes to ‘Cafe Corner’, a 2007 model that now sells at 2230% of its original price.
What does this all mean? Well if any of you kept your old Lego sets, especially if they’re still in good condition, then you could have a rapidly appreciating asset in your hands. Too bad for me, I lost virtually all of my old Lego sets when I moved houses several years ago!
We’re all quite familiar with traditional investment asset classes. You have cash investments such as high interest accounts and term deposits. Then you have the debt investments like bonds, you’re also probably aware of shares, property and even some derivative products like futures and options.
As investors, perhaps we are not thinking outside the box enough when it comes to alternative investment asset classes. Alternative investments could include stamps, antiques, artwork, film etc. These assets generally gain a lot of value over long periods of time. They rely on the perception of rarity and would generally appreciate over time. The main advantage of these ‘alternative’ assets is that they don’t tend to move with the stock market and therefore a great diversification tactic against any market volatility.
My uncle for one, is a collector of antique furniture. Let me know in the comments below if you can think of any other ‘alternative’ investment assets!