I was thinking about dropping some money into a nice custom knife. I was thinking of just storing it and maybe selling it for a slight profit in some time. What are your views on it? Do custom knives increase in value? Which kind of customs do you reccommend? How long should one wait before selling it? Would it keep gaining value over the years?
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Custom Knife Investment
- Thread starter iainfm
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What's happening in the world of custom knives? Just six months ago one would be tared and feathered and run out of town for mentioning the "I" word in a thread, now every forum has a "Custom Knives as an Investment" thread.
I'm kind of kidding, but it's true, seems many are looking towards custom knives as an investment recently. And that's a very good thing in my opinion.
It totally depends on the specific knife and maker you are investing in. Successful timing usually equals successful investing.
Having a successful plan for marketing and selling your knives is obviously very important if you expect to maintain a positive ROI over time. In my custom knife collecting/investing seminars I share my ten guidelines for selling custom knives.
Hope this helps.
I'm kind of kidding, but it's true, seems many are looking towards custom knives as an investment recently. And that's a very good thing in my opinion.
It totally depends on the specific knife and maker you are investing in. Successful timing usually equals successful investing.
Having a successful plan for marketing and selling your knives is obviously very important if you expect to maintain a positive ROI over time. In my custom knife collecting/investing seminars I share my ten guidelines for selling custom knives.
Hope this helps.
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As has been discussed here ad nauseum, custom knives are a joy to own and use. You should buy them because you love them. Although some people make money on them, you have to be very diligent and very lucky. Most collectibles are not great investments. They're easy to buy, but difficult to sell. For the effort put into gaining the expertise to make money on them, you could get a much better return on a host of other investments. The fact that the good ones retain value and sometimes appreciate, is a good additional rationalization to buy something you desire and love. I don't think it should ever be the primary reason. 
Les Robertson
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Hi Iainfm,
7 years ago I started using the "I" word with custom knives. I was summarily told by many many many members of this forum that in no uncertain terms that custom knives could not be and should not be investments.
As Kevin said right now on 4 forums that I can think of there are threads about investing in custom knives.
As well I just finished an article about 2 weeks ago for the next issue of Knives Illustrated with regards to investing in custom knives.
As Yitz pointed out you have to work at it. The word luck is generally used by those who do not understand that Luck is when opportunity and preparation meet.
It does help if you look at investing in knives you like.
While not mutually exclusive...usually collecting and investing have two different goals and two different mind sets.
When you ask collectors regarding investment knives, more often than not they will list their favorite makers. When pushed for answers why they are good investments they will be slow to answer with specifics.
An investor will be able to give you specifics on who's knives to buy and why.
Investment knives should have a track record of a specific level of Return On Investment (ROI), Market Position, After Market performance, short term or long term investment, etc.
Enjoy the hobby and do your homework. There are no short cuts.
Remember, free advise from well meaning collectors is worth every penny you paid for it.
7 years ago I started using the "I" word with custom knives. I was summarily told by many many many members of this forum that in no uncertain terms that custom knives could not be and should not be investments.
As Kevin said right now on 4 forums that I can think of there are threads about investing in custom knives.
As well I just finished an article about 2 weeks ago for the next issue of Knives Illustrated with regards to investing in custom knives.
As Yitz pointed out you have to work at it. The word luck is generally used by those who do not understand that Luck is when opportunity and preparation meet.
It does help if you look at investing in knives you like.
While not mutually exclusive...usually collecting and investing have two different goals and two different mind sets.
When you ask collectors regarding investment knives, more often than not they will list their favorite makers. When pushed for answers why they are good investments they will be slow to answer with specifics.
An investor will be able to give you specifics on who's knives to buy and why.
Investment knives should have a track record of a specific level of Return On Investment (ROI), Market Position, After Market performance, short term or long term investment, etc.
Enjoy the hobby and do your homework. There are no short cuts.
Remember, free advise from well meaning collectors is worth every penny you paid for it.
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just my 2 cents.
for me investment is all about the demand supply ration.
i would invest in a maker who has good demand and makes few knives.
michael walker,jurgen steinau,wolfgang.
problem is you wont find their knives easily.very few for sale.
for me investment is all about the demand supply ration.
i would invest in a maker who has good demand and makes few knives.
michael walker,jurgen steinau,wolfgang.
problem is you wont find their knives easily.very few for sale.
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Sohail this makers for me are the best!!
Emmanuel
Emmanuel
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I agree with your statement, however I would replace "good demand" with "sustainable demand". Sustainable demand brought about by my definition of "right maker" in my above post.
The three makers you mention above are incredibly fine makers/artist and "blue chips" so to speak in regard to custom knife investing. However, in most cases you will have had to pay a substantial premium (thousands of $$$) to acquire one of their knives unless fortunate enough to have purchased direct from the maker. If my memory serves, a Steinau which was purchased from him at the last AKI was immediately re-sold for 6-7 thousand dollars more. "Flipping" in itself is another area of discussion.
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I agree completely...get in knives for the love of the game, IMO its a bad investment. Aside from Nihonto (proper japanese blades with papers) which you will get decent returns from even with lessor smiths, I dont think there is much investment value. More a case of locking up thousands into something that may or may not get the return value you expect for the time you've locked that cash in the knife.
The people that make money off resale of high end customs that i've seen on here do not play around with small amounts of cash.
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It's not like a collector has to choose between collecting knives they enjoy and collecting knives as an investment. You can buy knives you like that will more than likely increase in value.
I'm definitely a knife collector first, but also enjoy the investment side.
I don't agree that successful knife collecting is just for the higher end guys, as there's good investments in knives in the $300-$500 range.
I agree with you guys though, if just looking for an investment, buy David's lot.
I'm definitely a knife collector first, but also enjoy the investment side.
I don't agree that successful knife collecting is just for the higher end guys, as there's good investments in knives in the $300-$500 range.
I agree with you guys though, if just looking for an investment, buy David's lot.
Les Robertson
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Hi Castro,
Kevin wrote:
I agree with that and the fact that the maker needs to produce.
Eventually you end up with a Jim Schmidt situation. Jim made very few knives and now almost all of these knives are with a small group of Schmidt collectors.
Given there are limited if any Schmidt's on the market...interest (and demand) will wane with the next generation of collectors.
Kevin wrote:
I agree with that and the fact that the maker needs to produce.
Eventually you end up with a Jim Schmidt situation. Jim made very few knives and now almost all of these knives are with a small group of Schmidt collectors.
Given there are limited if any Schmidt's on the market...interest (and demand) will wane with the next generation of collectors.
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I collect. I know which segments of certain makers' knives gain in value, invariably. When the issue of investment advice comes up, many are keen to chime in with their feelings. Bottom line - I know what my expertise is, and I stick with it. Why would I share information on the four or five knives I expect to come to market in a given year, knives that I know everyone wants?
The answer is I won't. Anyone who wants to invest in knives, good luck. Nothing is a sure thing, but I know what works for me. And to the "newbie" knife investors out there - listen and gleen what you feel is important information - but this economy is going to kill you if you don't watch out. Don't expect what works today will work tomorrow.
Best,
Bob Betzner
The answer is I won't. Anyone who wants to invest in knives, good luck. Nothing is a sure thing, but I know what works for me. And to the "newbie" knife investors out there - listen and gleen what you feel is important information - but this economy is going to kill you if you don't watch out. Don't expect what works today will work tomorrow.
Best,
Bob Betzner
Les Robertson
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Hi Robert,
I disagree with you 100% on this.
Too many collectors don't understand the term "Investing". Just like they do not understand "Return On Investment".
Here in the US Banks offer Certificates of Deposit (CD's). Paying right at 2% right now (plus taxes when you cash them in).
If you bought a custom knife for $100 and sold it within 6 months for $103 you would make 3% interest. More than what some people feel is a sound and safe investment.
For some reason it seems that if someone is not getting $thousands$ of dollars from the sale of a knife...it cannot be considered an investment?
Davis listed a Lot in Granbury Texas. What will be the Annual ROI (less taxes, titles, and attorneys fees) when it sells. As what enters here his called "Time Value of Money" (TVM). Basically the longer you hold an asset the less your money is worth.
There are long and short term investments.
I would submit to you and Dave Broadwell that those who make a blanket statement that custom knives cannot be good investments....have not done your homework.
I invest with and make money with custom knives every day.
Yes, you can say that is because it is my business. Even with the discount there is enormous risk if you are trying to make a living doing it. Perhaps even more risk than other business's as I am selling something that no one needs.
As well you have both collectors and makers telling other potential buyers that the knives the buy and the knives they make should be bought purely for fun. A maker may want to re-consider a statement like that.
BTW, Dave, The Vanguard knives you made excursively for me, are now selling for between 35 and 55% more than what people initially paid for them.
Again, you might want to rethink that custom knives are a bad investment thing.
I disagree with you 100% on this.
Too many collectors don't understand the term "Investing". Just like they do not understand "Return On Investment".
Here in the US Banks offer Certificates of Deposit (CD's). Paying right at 2% right now (plus taxes when you cash them in).
If you bought a custom knife for $100 and sold it within 6 months for $103 you would make 3% interest. More than what some people feel is a sound and safe investment.
For some reason it seems that if someone is not getting $thousands$ of dollars from the sale of a knife...it cannot be considered an investment?
Davis listed a Lot in Granbury Texas. What will be the Annual ROI (less taxes, titles, and attorneys fees) when it sells. As what enters here his called "Time Value of Money" (TVM). Basically the longer you hold an asset the less your money is worth.
There are long and short term investments.
I would submit to you and Dave Broadwell that those who make a blanket statement that custom knives cannot be good investments....have not done your homework.
I invest with and make money with custom knives every day.
Yes, you can say that is because it is my business. Even with the discount there is enormous risk if you are trying to make a living doing it. Perhaps even more risk than other business's as I am selling something that no one needs.
As well you have both collectors and makers telling other potential buyers that the knives the buy and the knives they make should be bought purely for fun. A maker may want to re-consider a statement like that.
BTW, Dave, The Vanguard knives you made excursively for me, are now selling for between 35 and 55% more than what people initially paid for them.
Again, you might want to rethink that custom knives are a bad investment thing.
Les Robertson
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Hi Bob,
So you are saying you can't just go out and buy anything you like, not pay attention to trends, after market performance, demand, makers position in the market, etc.
Really?
So your saying you would have to treat the investment knife like any other investment. Conduct your due diligence, know what to buy and when to buy and know when to sell.
Interesting concept.
So you are saying you can't just go out and buy anything you like, not pay attention to trends, after market performance, demand, makers position in the market, etc.
Really?
So your saying you would have to treat the investment knife like any other investment. Conduct your due diligence, know what to buy and when to buy and know when to sell.
Interesting concept.
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Hi Bob,
So you are saying you can't just go out and buy anything you like, not pay attention to trends, after market performance, demand, makers position in the market, etc.
Really?
So your saying you would have to treat the investment knife like any other investment. Conduct your due diligence, know what to buy and when to buy and know when to sell.
Interesting concept.
Well, to put it plainly, I know my sub-sub-sub-sub market as well as anyone else, if not better. So I guess that's saying close to the same thing - but not exactly.
Bob
Last edited:
Les Robertson
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Hi Omni,
Is that how you approach all of your other investments? I hope not.
Look I get people are passionate about the knives they buy.
The worst knife junkies become dealers...so I understand completely.
I think the 1 thing that people are missing is that mind set (in most cases) of collectors is different from that of the investor.
I agree if you buy what you like with complete disregard for the makers position in the market, their pricing, after market performance, demand, etc.
Yes, you will be very lucky if you can sell your knife and even get your money back.
Is that how you approach all of your other investments? I hope not.
Look I get people are passionate about the knives they buy.
The worst knife junkies become dealers...so I understand completely.
I think the 1 thing that people are missing is that mind set (in most cases) of collectors is different from that of the investor.
I agree if you buy what you like with complete disregard for the makers position in the market, their pricing, after market performance, demand, etc.
Yes, you will be very lucky if you can sell your knife and even get your money back.
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The word luck is generally used by those who do not understand that Luck is when opportunity and preparation meet
I just think that statement is pure brilliance:thumbup:.
As for investing, it sounds simple, but 'buy low, sell high'! Which means look for a good deal, and don't buy something that is in premium demand. Hopefully, buy before it gets there!
Just gotta say, I am just putting my opinion out there. It should not be confused with experience, which many more of these guys have loads of. This is indeed the place for questions like this if you are looking for good feedback:thumbup:
I just think that statement is pure brilliance:thumbup:.
As for investing, it sounds simple, but 'buy low, sell high'! Which means look for a good deal, and don't buy something that is in premium demand. Hopefully, buy before it gets there!
Just gotta say, I am just putting my opinion out there. It should not be confused with experience, which many more of these guys have loads of. This is indeed the place for questions like this if you are looking for good feedback:thumbup:
Les Robertson
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Hi Lorien,
That quote is from Seneca, from the mid first century AD. It has been around for awhile.
Investing in no way, shape or form is "simple". If you plan on a Return from that investment...someone, whether it is you or someone you hire (like a broker or investment adviser) is going to have to do some homework.
You can buy knives that have a premium. The amount of premium you are willing to pay will be part of your homework regarding your ultimate ROI.
If someone sells you knife "A" that has a retail price of $400...the charge you $450 to buy the knife and you feel you can sell it for $550...then paying a premium would be worth the risk of the investment.
However, if you are paying a stupid premium (which you used to see more of) like double or triple retail...the chances of that knife continuing to go up is not likely.
As well when that market comes to a halt and starts to pull back some of the gains...you will be left with a knife that can only be a loser (from an investment perspective).
There are numerous collectors who bought High in the late 2007's and early 2008's...who did not conduct their due diligence. They now have a knife that they will never get their money out of.
Note, generally the makers have absolutely nothing to do with the stupid premiums in the aftermarket. There have been a couple who chased the aftermarket price....and are paying for it now with shortened waiting lists, canceled orders and no longer selling out at shows.
It is very difficult for a maker to lower their prices...after they have sold several knives at the current inflated price.
That quote is from Seneca, from the mid first century AD. It has been around for awhile.
Investing in no way, shape or form is "simple". If you plan on a Return from that investment...someone, whether it is you or someone you hire (like a broker or investment adviser) is going to have to do some homework.
You can buy knives that have a premium. The amount of premium you are willing to pay will be part of your homework regarding your ultimate ROI.
If someone sells you knife "A" that has a retail price of $400...the charge you $450 to buy the knife and you feel you can sell it for $550...then paying a premium would be worth the risk of the investment.
However, if you are paying a stupid premium (which you used to see more of) like double or triple retail...the chances of that knife continuing to go up is not likely.
As well when that market comes to a halt and starts to pull back some of the gains...you will be left with a knife that can only be a loser (from an investment perspective).
There are numerous collectors who bought High in the late 2007's and early 2008's...who did not conduct their due diligence. They now have a knife that they will never get their money out of.
Note, generally the makers have absolutely nothing to do with the stupid premiums in the aftermarket. There have been a couple who chased the aftermarket price....and are paying for it now with shortened waiting lists, canceled orders and no longer selling out at shows.
It is very difficult for a maker to lower their prices...after they have sold several knives at the current inflated price.
The only issue I see with investing in knives is the somewhat limited audience/market. Unless you are a dealer, you can be limited to a few internet sites and maybe a show to resell the knife. Plus there are very few people who are willing spend a lot of money to purchase the knife from you (the "knifenut" community is small compared to the total population). Now with other types of investments like stocks, gold, silver, ect, you have have a bigger market because they are seen as traditional investments and more people would be apt to buy it from you.