I was recently participating in a thread over on Glocktalk discussing which models would make a good investment. I think the rise of Glock collecting is still in it’s infancy and over time it will provide substantial returns to those who are selectively purchasing. As of now, I see a lot of potential in early and rare Gen 2 models that are still being sold in the sub-$1000 price point as of now. As this hobby catches on, all models that are out of production will have increasing value. Though I believe it will always be true that the earlier the gun, the more value it will have, that does not necessarily translate to the best investment potential–some early guns already carry significant premiums so the argument can be made that it’s better to have ten nice Gen 2 guns vs one early Gen 1 gun.

The challenge was raised in the forum discussion about whether guns should be considered investments at all so I want to give my opinions here as the question raised is certainly a valid one. In today’s politically charged world, it seems that the “term” investment has been re-defined as anything we spend money on. But I would argue that not all expenditures are investments–in fact a large portion of what we spend money on should just be classified as expenses as we could not reasonably expect any rate of return. According to dictionary.com, an investment is: 1. The investing of money or capital in order to gain profitable returns, as interest, income, or appreciation in value. 2. A particular instance or mode of investing. 3. A thing invested in, as a business, a quantity of shares of stock, etc. 4. Something that is invested; sum invested. (this one is the politician’s favorite, of course). 5. The act or fact of investing or state of being invested, as with a garment. 6. A devoting, using, or giving of time, talent, emotional energy, etc., as for a purpose or to achieve something.

Clearly from these possible definitions, it’s easy to say that a gun purchase is an investment. Because of inflation, even a standard gun will typically appreciate in value over time. But is any gun a “good” investment? That question has many more and subjective answers.

If we are going to define “good” simply as the rate of return on an investment, then it’s hard to argue for collectible guns as opposed to using real estate or the stock market. Still, if we are only using rate of return, then it would make it easy to argue for highly leverage stock options as offering the highest possible rates of return. With investment, it amazes me how often the investor forgets to calculate in risk as to the real value of an investment. Even setting this aside for a moment, I could still make the argument that early Glocks have a few years ahead of them where 10% year over year appreciation is definitely possible… and at that rate, it would be in line with historical stock market returns depending on how you gauge and what time frame you are looking at them.

However, I would find it hard to look at today’s economic environment and believe that we are in a safe “historical” type setting for stocks. Gold has often been used as a hedge in hard times and I definitely think collectibles belong more in that category than in a straight asset class. And I don’t think it’s a stretch to believe that there is less risk associated with collectibles as opposed to precious metals. In the very worst scenario of full economic collapse and the coming of the apocalypse, at least my Glock will still have a utilitarian purpose of self defense.

So are these good investments? I still think it’s a yes, but you really have to answer that question for yourself based on what your goals and risk-tolerances are. Truthfully, the question really shouldn’t be from an investment standpoint because for anyone that I know in the Glock game, this is a hobby! And what other hobby do you know of that isn’t just a huge money pit???

~ThatGlockGuy

Without further adieu, some recent “investments” I’ve acquired: