What the Puck?—Portfolio Diversification with and Value Determinants of Hockey Cards

Abstract

In the last decade, passion assets have emancipated themselves as an alternative asset class, which is why collectibles are increasingly considered financial assets and part of the market portfolio. This article deals, for the first time, with hockey cards as a particular genre of collectibles from an investment perspective: Based on monthly card price data, risk–return positions and determinants of card prices are analyzed. Findings suggest that, parallel to high expected returns, hockey card investments carry significant price risks arising from market illiquidity that need to be mitigated, as well as specific costs related to these assets, alongside their diversification benefits to investment portfolios. Furthermore, value determinants for hockey cards tend to be measurable objectively (capital market, supply-side, or player-specific indicators). Consequently, cards can be interpreted as financial rather than emotional assets, albeit there are indications of comparably volatile prices in the hockey card market, meaning price forecasts are less reliable than those for traditional financial assets. Though considering hockey cards as investment objects is, therefore, not trivial, recent developments of market processes and structure indicate that the market will receive greater attention, ensuring higher market liquidity and better trading opportunities.