Logan Paul's $5.3 million Pokémon bet raises a bigger question: Do collectibles belong in your portfolio?

By Weston Blasi and Charles Passy

Collectibles may offer eye-catching returns, but not all financial experts are on board

Logan Paul with his Charizard Pokémon-card chain during a press conference following his exhibition boxing match against Floyd Mayweather.

Should you ditch stocks and bonds and just put your money in Pokémon cards?

That's what internet personality and professional wrestler Logan Paul has suggested. He appeared Tuesday on Fox Business's "The Big Money Show," touting his recent investments in the world of such cards and sharing his plan to auction off an extremely rare one - a top-graded Pikachu Illustrator card - that he bought in 2022 for $5.3 million.

"It's the rarest and most valuable Pokémon card in the world," Paul said. "If you have the money, don't be afraid to take a risk, especially if you're young."

Paul, 30, also owns a Pristine 1999 Base 1st Edition Charizard Holo card in his collection.

During his TV interview, Paul noted that investing in alternatives like Pokémon cards might have more relevance to younger people than the "traditional conservative environment" of the stock market.

While Paul's comments might be seen by traditionalists as extreme, the fact remains that alternative investments have been around for centuries and continue to evolve as a category - from gold (GC00) to crypto (BTCUSD) to even contemporary collectibles like Pokémon cards. So, should they have a place in a well-balanced portfolio?

Financial professionals are generally guarded about that idea.

Certainly, some see room for precious metals; gold is often considered a hedge against inflation, though there's plenty of debate about that. But when it comes to collectibles, there's frequently a sense they don't quite measure up as a legitimate asset class.

That's due to any number of factors, financial professionals say. Collectibles aren't as liquid as traditional investments, meaning they can't necessarily be sold in an instant like a stock. Nor do they generate income, such as dividends. Plus, they can carry added costs in terms of storage and insurance.

And while Thomas Van Spankeren, co-owner of Rise Investments, a Chicago-based financial advisory firm, acknowledges there's a certain enjoyment that comes with owning something rare - he is a coin collector himself - he thinks collectibles should constitute a small portion of a portfolio at best.

Van Spankeren also warns against buying collectibles that are suddenly trendy but can just as suddenly lose their value.

"I would go back to the Beanie Baby craze," he said, adding that he isn't too keen on Pokémon cards, either.

Similarly, Edward Hadad, an adviser with New York-based Financial Asset Management, recommends that speculative assets should not exceed more than 5% of a person's portfolio.

"Our philosophy is to invest in a well-diversified portfolio of stock and bond funds," he said.

Others professionals are adamant that collectibles have no place in a portfolio.

"It is more like gambling than traditional investing," said Chad Gammon, a veteran financial adviser and owner of Custom Fit Financial in Cedar Rapids, Iowa.

Still, a 2020 report by Credit Suisse in collaboration with Deloitte Luxembourg found that among ultrahigh-net-worth individuals, 44% allocated 2% to 5% of their wealth to collectibles, while 31% allocated more than 5%.

Collectibles "often play an important role as a store of value," wrote Urs Rohner, who was Credit Suisse's board chair at the time of the report's release.

It may be worth noting that when it comes to Pokémon cards, the market has seen a monthly cumulative return of more than 3,800% since 2004, based on an index by analytics firm Card Ladder through August. That compares to a 483% increase in the S&P 500 SPX over the same period.

And yet, Stephen Fishler, a veteran collectibles dealer and expert in the field, says that doesn't mean people should be instantly putting money in Pokémon cards - or any collectibles category, for that matter.

He argues that it takes time to research and know the ins and outs of each category and each particular collectible. Certain items may be overvalued, while others may be the proverbial diamonds in the rough. It's no different than understanding a particular stock, Fishler asserts.

"You have to educate yourself," he said. "A feeling isn't good enough."

-Weston Blasi -Charles Passy

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

12-27-25 1328ET