Guns and ammo are not only for hunting and protection; you can also collect them and turn a profit. In fact, investing in them offers some interesting opportunities.
In this article:
- Are Guns a Good Investment?
- Advantages to Investing in Guns and Ammo
- Disadvantages of Ammo and Gun Investments
- How to Invest in Guns
- Best Guns to Buy for Investment
Guns and Ammo | How They Can Be Smart Investments
Are Guns a Good Investment?
Guns are a significant part of American culture. On some level, they are integral to who we are as people. Beyond that, the market for guns has grown at a 27% annual rate in the past five years.
Investors in the sector come in all ages, income ranges, and political persuasions. Men, women, and countless other groups all enjoy firearms.
Collecting guns and ammo can be profitable if you know what you are doing. Over the last few years, prices for guns and ammunition have climbed. Some claim the increase is due to concerns over the government rescinding gun rights. Others believe it’s only economics.
In fact, during the last recession, wealthy investors began buying high-end collectible guns. The reason is simple: guns hold their value.
Advantages to Investing in Guns and Ammo
Like classic cars and fine wine, well-cared-for guns and ammo usually hold their value. They may even rise in price. Firearms are heirlooms you can pass down in a family for many years. Often, you can even use antique guns. They are both functional and valuable.
On average, most firearms increase in value by 3% to 5% per year. The previous owner of the firearms may also boost their marketability. For example, a pistol that the gangster John Dillinger carried in his sock sold for more than twice the estimated worth in an auction. An 1886 Winchester rifle from Army Captain Henry Ware Lawton, who captured Geronimo, sold for $1.2 million. It’s the most expensive gun ever purchased in an auction.
If you decide to get into collecting guns as investments, be aware most collectors look for the following:
- Old guns in new condition
- Original boxes or packaging, if possible
- Guns manufactured by famous gunsmiths
- Guns with a documented history of interesting previous owners
Investing in firearms means doing your homework; it’s necessary when you hope to sell them to a collector for more than the original price. You need to research and learn about the trends in the gun-collecting world. You also have to jump on good deals.
Expect to wait years, or even decades, for the guns and ammo to climb in value. While you own them, don’t fire them. With that said, consider buying a gun you like. Even if you can’t sell it for a profit, you can at least pass it on to your family members.
Disadvantages of Ammo and Gun Investments
Of course, there is no guarantee the value of guns and ammo will go up. Like any investment, there are challenges.
Often, when the government is proposing a ban, demand spikes and prices go up.
When that happens, you may need to act fast and sell your stock. The National Institute of Justice reports increases in price and production after substantial drops. Usually, there is a quick increase in value followed by a decline to previous levels. If guns and ammo are banned, there is always a chance that sale values may drop.
Even the best gun investments don’t offer tax benefits. In contrast, traditional investments like individual retirement accounts (IRAs) bring you tax breaks.
You also need to take care of your guns and ammo. You can lose them from fire, flood, or theft. These concerns do not exist when you invest in stocks, certificates of deposit (CDs), IRAs, or other intangible investments.
How to Invest in Guns
Rather than buying guns and ammo, some investors put their money in gun stocks. At the time of writing, Smith & Wesson, Sturm Ruger & Co., and Cabela’s are all experiencing a good short-term run. Gun demand is both strong and steady these days.
Some other investors focus on ammunition. They stockpile it in the hopes gun owners may run out. To get a good price, they buy in large quantities. They often specialize in just a few types of ammo. In other cases, investors purchase both firearms and ammunition as well as accessories. Ultimately, you get to decide what works in your situation.
Best Guns to Buy for Investment
With any investment, diversity is key. For example, you could consider buying several shotguns, .22-caliber rifles, and some defensive handguns and game rifles. Of course, you need plenty of ammunition for each.
When looking for antique guns as an investment, choose classic, well-respected brands like Colt and Winchester. They tend to hold their value better than lesser-known brands. Also, pay attention to the condition. Guns in their original packaging and those you have not fired usually bring the highest return on investment.
To be on the safe side, you may want to invest in a gun you can use now. Even if you can’t sell it in the future, you can still get some use out of it. As indicated above, you can pass it to your heirs.
Don’t forget to download, save, or share this handy infographic for reference:
Guns and ammo are not just essential for protection and hunting, it is also a great investment that leads to awesome profit. Watch the video below to understand better!
Investing intangible items such as guns and ammo requires a lot of education. There are ways, though, to invest in tangible items without keeping them at your house. For instance, you can get an IRA with investments in precious metals such as gold and silver. You don’t have to take care of those items and keep them in your home as you do with guns and ammunition. However, you can still reap profits if they grow in value. To learn more, explore the rest of our site or speak to the people at Birch Gold Group, on of the nation’s top precious metals dealers.
Would you consider investing in guns and ammo? Share your thoughts in the comments section below.
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