The year 2020 was definitely a historic year and one that will go down in the history books. The pandemic ushered in a new way of thinking and a new way of life for most people. Social interactions changed. The way we shop and communicate changed. I have written about the effects of the pandemic on the overall antiques and collectibles trade in previous articles. Online auctions are now firmly cemented as the future of the trade. Politics aside, among all the questions and dilemmas that remain in what is hopefully the end of the pandemic, one that is not often talked about is inflation. If you want to see just how disastrous the effects of inflation can be, look no farther than the current real estate prices and gas prices. People are struggling to keep up with these rising costs, even with stimulus payments. Inflation is nothing new to the overall economy. If we go back to the 1970s, the United States had experienced double digit inflation during that time. Generations that came of age during that time have often tried to warn younger generations as to the disastrous effects of inflation. The antiques and collectibles trade is not immune either. I have already talked about how, at present time, many collecting categories are experiencing massive price appreciation in the trade. Everything from rare investment-grade coins to certain traditional antiques to most pop culture collectibles are soaring in value thanks, in part, to stimulus money being spent on them. Certain auction houses and collectible dealers are even reminding would-be buyers that collectibles can be a great hedge against inflation. It is this very point that I want to discuss in detail because this is actually somewhat of a myth that has been perpetrated over the years. Let me begin this discussion by stating that it is very true that certain antiques and collectibles have been a good hedge against inflation over the years and decades in which inflation was running at an all-time high. This is only part of the story, however, as in a lot of cases when inflation is running low, certain antiques and collectibles can be horrid long-term investments. I once had a well-versed mentor in the trade who used to remind me that over the short term the antiques and collectibles trade is very predictable, but over the long term it operates much like a casino. I tend to agree with this assessment. For instance, in the year 2020 and heading into 2021, certain collecting categories like vintage Pokemon cards, Magic: The Gathering cards and collectibles, and even certain vintage video games sold and are selling well on the secondary market. I predict this trend will continue over the next few years. That said, how many of you would be willing to bet money that 20 years from now a lot of these items sell for more than what they are selling for today? I think very few of you would be willing to take this bet. Applying this logic as to whether or not these kinds of collectibles would make a good hedge against inflation is risky as a result. If demand lessons for these items over time, these collectibles would not make a good hedge against inflation long-term. I have often argued with speculators and investors who operate in the antiques and collectibles trade that if one was to assemble a portfolio of collectibles to combat inflation over the long-term that this portfolio should have more established antiques and collectibles in it rather than betting on newer speculative collectibles. Pokemon came to the United States in the late 1990s. Magic: The Gathering was created in 1993, and most vintage video games selling for incredible sums right now are from the mid-1980s or later when the original Nintendo Entertainment System hit North American shores. These items are not good inflation hedges in my opinion simply due to the fact that they are unproven as long-term collectibles in the trade. In order to combat inflation over the long term, you need proven antiques and collectibles. Rare coins have a great track record of doing just that, so do high-end pieces of currency, and even vintage sports cards. This is never talked about in the literature that graces most collectible dealers or high-profile auction sites, unless they happen to cater to those particular markets. Then it can become a marketing ploy. In conclusion, inflation is something that we all should be concerned about regardless of our political affiliation or personal views on capitalism and the overall health (or lack thereof) of the economic system by and large. Inflation is also something that collectors should also be concerned about because more than likely the collectibles they are holding in a lot of cases are anything but good hedges against the ravaging effects of inflation. This is one myth that the collectibles trade needs to stop promoting, as it can have disastrous consequences to generations for collectors. Does anyone really believe that in the year 2021, Hummel figurines offer a good inflation hedge? I dont think so. Thank you for reading. Shawn Surmick has been an avid collector since the age of 12. He currently resides in his hometown of Boyertown, Pa., and is a passionate collector of antiques and collectibles. His articles focus on various topics affecting the marketplace.