Rock Island Auctions (courtesy rockislandauction.com)

Rock Island Auctions sells guns. Other people’s guns. So you’d kinda expect them to recommend firearms as an investment. And so they do. But as you read this blog post remember that it’s entirely possible to lose money “investing” in guns. As it is in the stock market. All you have to do is buy the wrong gun or stock. Or buy at the top of the market. Or a dozen other variables beyond your control. As my father used to say, something is worth whatever someone will pay for it. Minus commission, of course . . .

Ask any firearms collector if guns are a good investment and you’re bound to receive a response in the affirmative. It’s not exactly an unbiased answer, but it is still drawn from sound personal experience. Besides, wasn’t the economy’s most recent low spot in 2008? Haven’t such indicators as the Dow Jones and the S&P 500 recovered nicely since then? What about gold? I keep hearing about its value skyrocketing.

These are reasonable questions from someone debating on whether or not to invest some money into firearms versus other more traditional investment vehicles. Of course, we’re not talking about the stocks of firearms companies as investments (although those are doing quite well for themselves currently), but the firearms themselves. Are guns a good investment? Aren’t all the “good ones” taken? Not so fast. Here’s some information that might make you think otherwise.

1.  Values Are Up

Gun values are up and it’s not just some bubble in the market. Yes, modern sporting rifles (a.k.a. “assault rifles”) saw a recent price bubble, but over the last five years the vast majority of guns in their usable life have seen and maintained an increase in value. Guns past their “useful life” and in their “collectable life” have been largely gaining value for decades.

2.  Increasing Gun Values Exceed Other Market Increases

The examples we list below are only the beginning. While their values have increased, and done so at a handsome percentage, other genres of collecting make these look like small gains. Through research and careful selection, one stands to outperform even such vaunted standards at the S&P 500 and even gold! Haven’t each of those investments vehicles been improving since 2008? Didn’t the S&P 500 just experience a new record high this week? The answer to both questions is “yes,” but the right guns readily show larger gains in leaps and bounds.

3.  You Can’t Shoot Stocks

OK, so this may not be an apples to oranges comparison, but it’s a huge plus to investing in guns. Firearms are useful beyond their investment value. You can display them, you can clean them, you can take them to shows, you can take them hunting with your old man, you can teach a youngster about them, and they’re a lot easier to trade than stocks. Truth be told, you may not want to fire a high dollar firearm into which you’ve invested tens of thousands of dollars as you may harm the value, but many of the other activities still apply.

Guns can be enjoyed in ways other investments cannot. You may hear one collector excitedly telling another about a recent purchase that he has chased for years; you’ll never hear that from a day trader. You might hear the pride in a collectors voice as he describes his collection; the only time you’ll hear financial experts talk that way about a portfolio is if it makes money. In gun collecting, there’s so much more than money, like history and the pursuit. Not only is investing in guns worthwhile financially, you can use them as tools as well as for recreation.

4. Guns Are Tangible

This section isn’t meant to be some “the sky is falling” message about our government or the stability of the world economy, etc. However, there is a lot of risk present to investors today: the Eurozone, a government shutdown, debt ceilings, recessions, defaults, and so on. It is in unstable climates that investors seek stability. One only has to look at the popularity of precious metal commodities in the last several years to know that people want finances that aren’t just potentially vulnerable electronic numbers in a bank or on the stock market. People want things they can touch, things that they can hold on to and guarantee its security. Collecting firearms provides that opportunity. You can hold them, they’re worth an increasing amount of money, and you don’t have to worry about losing them if a bank or market collapses.

Examples

Now, we’re not licensed financial planners or sages of what the future may hold, but we can speak from the experience of selling over 22,000 firearms a year and evaluate some past information in an intelligent fashion. We are not licensed financial advisors.  Please due your own due diligence or contact a professional before making any and all financial decision.  We simply have the good fortune to possess loads of data and we’re not afraid to use it. All data that we used to derive the information below was obtained in the following way:

  • We only used guns that are in 95-100% of their original condition
  • We attempted to eliminate as many “special” guns as possible (unique history, one-of-a-kinds, etc) since they can cause larger swings in value.
  • All dollar figures shown are a yearly average.
  • Values for gold, S&P 500, and Dow Jones are year end figures, except for 2013, which uses October 16 as its final day.

Keep in mind, the amount that you bought/sold a gun for may not match the figures that we provide below. Our figures are averages. They take into account many different finishes, barrel lengths, grips, calibers, serial number ranges, boxes, letters, and so on. These numbers are not published to a pricing guide of any sort, merely to indicate a rising trend in value for several of the most popular firearms that we have sold in the last 5 years.

 Last 3 years: 72.68%
 Last 6 years: 183.31%
There’s more than a dozen Colt Pythons to choose from in our upcoming auction in varying barrel lengths and finishes.

Last 3 years: 43.84%

Last 6 years: 52.78%

This classic piece of American firepower, called “the greatest battle implement ever devised,” has also enjoyed quite the rise in value over the last several years. Patton would be proud.

Last 3 years: 123.52%

Last 6 years: 107.93%

Colt 1911s have been a proven high riser for several years.  The numbers on the left don’t even reflect the high dollar 1911s such as Singers, high condition first year production models, prototypes, and especially not the world record Singer than we sold in 2010 for $166,750.

Last 3 years: 111.89%
Last 6 years: 79.95%<

There are over 15 different high end Model 12 shotguns to choose from in this auction!  They include two engraved and gold inlaid by Master Engraver Angelo Bee, several trap and skeet grade models, and of course some of the ever popular trench shotguns.


Last 3 years: -9.39%
Last 6 years: 52.24%

Despite gold’s popularity and media coverage as a high performing investment, it still lacks the gain in value attached to many genres of firearms

Last 3 years: 36.89%

Last 6 years: 17.24%

The S&P is finally starting to look like its old self and is actually breaking some records as of late.  However, even considering that record breaking performance the returns still pale to that of numerous genres of guns.

Last 3 years: 32.79%
Last 6 years: 17.75%

Even at its historic highs, the mighty Dow Jones fails to match the growth of collectable firearms.

We could list guns, pictures, and charts for numerous pages, we could also spend an entire month comprising values and breaking them down and making them as specific as possible, but this is not a pricing guide.  What we are doing is drawing trends and averages by looking back at the data from hundreds of sales of the firearms selected.

As with any rise in value there may be a few segments left behind. Even in a bear market, not every stock gains money or even gains every year. However, by taking a step back and looking at those trends over a larger period, it becomes easy to see that guns have been a sound investment for quite some time. This financial benefit comes almost as an aside to most people who buy guns simply to enjoy them, use them, and be a part of that community. It’s yet another added perk to do what you love.

Best of luck in your collecting, investing, and of course, your shooting.

21 Responses to Rock Island Auctions: Stocks, Bonds or Barrels?

  1. I wonder if the value on the Colt Python pretty much doubling since 2010 has anything to do with the Walking Dead. Probably not, but interesting to consider…

    I had the opportunity to acquire one in a trade for a Colt AR and a kinda beat up Sig p228 back in 2008, I declined because I didn’t want to drive 3 hours to meet the dude. I’ve been kicking myself ever since.

  2. A 120 year old $20,000 colt SAA has risen in value at a rate of about 7% a year (assuming an original price of $5?)

    That’s fine but that is one of the BEST examples of a gun you wish you could go back in time to buy. The colt 1911 has only barley outpaced inflation at 6k.

    I love my firearms as a hobby but as an investment I think they appeal to those who ignore the long term history of income producing assets.

  3. Consult your own financial planner indeed!

    The S&P and the Dow reflect many hundreds of stocks. Selecting a handful of firearms retrospectively that have gained value is called cherry picking data, and is not a sound basis on which to invest. Past results are no guarantee of future performance.

  4. if you aren’t a professional firearms dealer or big-time collector, buy the guns because you love them and don’t focus on appreciation. If they don’t go up in value, you’ll still enjoy them so you haven’t wasted your money. If the guns do go up in value, that’s just icing on the cake.

  5. Vintage American guitars, banjos, and mandolins make these increases look paltry. Back in the seventies I bought a 1934 Martin D-28 for $300.00. That guitar today is worth roughly $30,000.00.

    • As much as Martins have appreciated, it is remarkable to think of how much older Stella’s have appreciated.

      Martin has always (AFAIK – correct me if I’m wrong) been a quality instrument. Stella, on the other hand… they were pretty inexpensive guitars. They sounded far better than you’d expect for what they cost.

      • It’s important to distinguish the original Stellas (like the original Leadbelly’s twelve string) from the later value priced models that millions of baby-boomers, myself included, learned on.

        The original Stellas were built by an Italian luthier, who’s name escapes me at the moment, in New York in the very early years of the twentieth century. These were quality instruments with a distinctive voice and response unlike anything built today. Depending on model and condition they can go for up to $50,000.00 for a twelve-string just like Leadbelly’s.

        The name was eventually acquired by Harmony in Chicago, who built the basic student models so common in the fifties and sixties. These guitars, rather crudely built of woods like beech and poplar, were about two steps up from a cigar box guitar. Despite their limitations the cheap Stellas HAVE increased in value, though to nothing like the degree of the originals. This dollar increase is largely due to their status as a boomer-era icon, combined with their kitschy fifties graphics. No matter who your personal guitar hero may be, if he was born before about 1960 there was almost certainly a Stella in his past. When I was a kid you could buy all the Stellas you wanted from pawn shops for $10.00 or $15.00. Current value, largely driven by Japanese collectors, ranges up to $400.00 or so

        • Ahhhhhh.

          This is why I like hanging out with gun people. I learn something new every day.

  6. I’m a self employed investor and gun collector. I’ve made it to 65 and still enjoy both.
    Any time frame can be manipulated to produce the result you want to prove. Any asset class can be cherry picked for the winners to prove your point. I invested in farm land in the 1970’s and it has allowed me to enjoy my lifestyle and invest in many other classes of investments.
    I’ve enjoyed great gains on some hobby investments. My single best return was on a Cessna 182RG that is long gone. Hobby investments may gain in value, but produce no income and some have ongoing expenses. Even with my return of over 100% on my beloved Cessna, the annual costs of ownership made it a far less rewarding investment.
    Buy what you enjoy. Some will go up in value and some won’t.
    Invest for the long term in what you know and hope for the best.

  7. One of the reasons why you see older, fine firearms appreciate in value so much is that most all of the guns made today are complete and utter crap by comparison. The fit, finish and workmanship on the vast majority of firearms today is shoddy, incompetently performed and comes with very poor customer service to make problems right. Example: Very few Glocks will ever be collectable. There’s nothing collectable about any one Glock vs. another, unless you have a paper trail to say that Glock A has some documented notoriety vs. Glock B (and every other Glock). They’re all just ugly, compressed cheez-whiz, and every Glock looks like just as ugly a piece of crap as the next one. Sure, sure. The Tacti-cool crowd will crow “they work flawlessly!”

    Yea, well, so does a fist-sized granite rock; I just have to get closer.

    Do you see many people collecting mundane rocks? No.

    But this situation didn’t used to be true before about 1960. You could call up the Colt, Remington, Winchester, S&W and other “custom shops” at a large gun maker’s company and say “I want X on my gun.” And you’d get “X” on your gun – done usually to very nice standards. Now your gun was different – and not in regular production.

    All you kids who like fondling your AR’s and other guns with matte black sand-blasted finishes: Go pick up a Python in original condition. Don’t just fondle any Python. Go find a really, really nice one, owned by someone who knows something about Pythons and who has purchased an example in original condition. Or go look at a high end Winchester rifle from before WWII.

    Look at the polish. Look at the blueing job on that gun. There is no major gun manufacturing company today that will deliver that finish on a factory firearm. None. To get something roughly approximating that level of finish, you have to buy a gun from a custom/boutique shop that specializes in making really nice guns. And you’re going to wait.

    Even some of the companies today producing the finest guns in their markets don’t make guns with very nice finishes. Freedom (not the hedge fund idiots running Remington/Marlin/et al into the ground, but the revolver company here in Wyoming) makes some of the best single action revolvers today. Superbly accurate. Incredibly strong. Wheel guns that can credibly take down large game. Over $2K each, new.

    Do they polish and finish a revolver to be anything like a Python? Nope. You get brushed stainless. End of discussion there.

    One of the best companies out there for finishes is Doug Turnbull’s outfit in NY State. He does wonderful firearms finishing. Doug is a meticulous craftsman, doesn’t accept crap – and charges what is a commensurate price with that level of workmanship – which is on par with what you’re seeing in the examples of nice, but not rare, guns above (eg, the Win12’s, the Pythons, etc).

    Thanks to the deliberate devaluation of the US dollar by the federal reserve, tangible items are going to go up in cost – but maybe not value.

    Tangible items in markets where there are no or few new examples of supply coming in will see their valuations skyrocket in concert with the Fed’s policy of currency debasement. Those will go up in value. That’s just simple monetary economics.

    Here’s an exercise. Read through this LC Smith Ass’n journal. All the double gun collectors have a journal these days, it seems. They’re filled with wonderful articles written by people who have a genuine love and interest in old firearms, and what is more, they’re often a source of excellent history on the US situation as a whole. Volume 7, No. 4 is one such, as it recounts how shotgun prices were crushed downwards by the economy going into WWI:

    http://www.lcsmith.org/Journal/Volume7Issue4.pdf

    Please read the article “Smith Distinction.”

    NB the price point of “field grade” or “utility” shotguns therein: About $25.00 or so. The Parker commanded a bit more – the Trojan was going for $27.50.

    OK, so… what’s that today? You certainly can’t go buy a new shotgun, even the roughest grade, from any manufacture today for $25.00. Your money isn’t worth a tenth of what your great-grandfather’s money was worth – in part, because his dollar bills were backed with gold.

    Your dollar bills are backed by nothing more than the greasy mendacity of politicians and bankers.

    Let’s go on over to the BLS, another one of those organizations that shut down their website in a snit-fit of PMS by the kakistocracy over the last couple of weeks. Therein, you will find an “inflation calculator” that uses the Consumer Price Index to tell you just how little your money is worth.

    http://www.bls.gov/data/inflation_calculator.htm

    Put in $25 in the little box. Pull down the “In” drop-down menu and choose 1913, which was when the Federal Reserve was created. There’s inflation data that pre-dates this, but for bankers, economists and bureaucrats, the world began when the economists and fellow thimbleriggers took control away from non-economist citizens of the US.

    Click on “Calculate.”

    And you get $590.60. Which would still get you a rough double gun from an outfit like Stoeger, and the shotguns are made in Turkey.

    I can (and do) buy used LC Smith, Parker and Fox Sterlingworth utility/field guns in rough condition for $600 to $1000. So they’ve appreciated even when we’re talking about the bottom-of-the-line, and abused. A field grade gun in nice, nice original shape might go for $2500.

    A nice gun in nice shape? Well, a nice Parker mid-grade in 1913 might have cost you $250. Today, that $250 would be $5906, but the price on the nice shotgun, in original condition, might be $8K on up. Today, you can buy a pretty nice O/U from Italy for $6K. You can buy Parkers, Foxes, Smiths and Lefevers in really nice shape for $6K too.

    Lesson: Buy quality, keep it in good condition. At the very least, it is a hedge against the morons at the Federal Reserve devaluing the currency in your pocket. At the best, it will go up in value – sometimes quite a bit.

    • definitely second you on the quality and workmanship of old firearms. That’s what my collection has been focusing on, recently i added two German Drillings (one from 1925, the other i’m having issues dating it) beautiful engravings, still fire and are very accurate. I’m sure they will still be around in another 100 years or more

  8. But you have to admit that while being a douche tactic buying guns before a panic and selling them during a panic is a good way to earn money.

  9. I’ve never made a dime’s worth of profit in all my years of buying and shooting guns. I never saw it as a business, but a love affair. And love will empty your wallet and tie you in knots.

  10. If I were to do the same chart you have above for the transferable full auto HK MP5k I bought in 1998 for 5k USD we’d make some of those stock brokers choke…

  11. I buy guns for their value as tools. That value holds strong as a hedge against recession, depression, political climate, and disaster. Guns are much more valuable in a week economy than they are as an investment in a stable one. The even better investment is ammunition. The components of ammunition will always increase in value over controllable inflation in a growing economy. In an economic downswing either supply will go down or demand will go up.

  12. I was a securities broker for 26 years and I invested in mutual funds ,Anuities and Antique Arms.The antique arms were far and away the best investments I ever did.My broker friends are still working and I have been able to retire and maintain a large asset base of antique arms which allows me to enjoy both Collectible arms as well as shooter quality arms as I enjoy both.

  13. Never, evernot even once, I mean it — invest in a collectible unless you’d own it forever on the intrinsic value it gives you.

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