New Study Says Investing in Legos is More Lucrative Than Gold

While some people believe that gold, jewelry, art, wine, or antiques are good long-term investments, a new study challenges that notion and presents a unique and more profitable alternative: Lego sets.

Economists from Russia’s Higher School of Economics discovered that the market prices of retired Lego sets sold on the secondary market increase by at least 11% per year, which is higher than the average returns provided by gold, large stocks, bonds, and alternative investments. The authors analyzed the prices of 2,322 unopened Lego sets from 1987 to 2015, as well as data from primary sales and online auction transactions, for their study.

The research will appear in the January issue of Research in International Business and Finance.

“We are used to thinking that people buy items like jewelry, antiques, or artworks as an investment,” said Victoria Dobrynskaya, an economics and finance professor at HSE and co-author of the study, in a university news article. “However, other options exist, such as collectible toys.” On the secondary LEGO market, tens of thousands of transactions take place. Even with the low prices of most sets, this is a massive market that traditional investors are unaware of.”

The researchers offer some explanations for why people pay so much for Legos. One significant factor could be the small number of sets produced and the small number of people who want to sell their Legos after purchasing them. Furthermore, LEGO has been producing Legos since the 1960s and has amassed a slew of nostalgic adult fans who treasure older sets.

There are a few things you should know before you start wondering if you have any Lego sets lying around your house that could be hidden treasures. To begin, prices for Lego sets on the secondary market, which vary greatly and range in annual returns from -50 percent to +600 percent, typically begin to rise two or three years after a set has been retired. This means that you must include high costs such as delivery and storage in your investment.

Second, the researchers discovered that prices for small or very large sets will rise faster than prices for medium-sized sets. The most valuable sets on the secondary market are those related to famous buildings, movies, or holidays. As a result, it’s no surprise that the Millennium Falcon, Death Star II, and Imperial Star Destroyer are among the most expensive Lego sets. Limited edition Lego sets and those given away at promotional events are also highly valued.

Finally, Dobrynskaya stated that if you are not a fan of Lego, it is difficult to enter the secondary market. There are many Lego sets available, and it takes a true fan to analyze the market and place a wager on a set that could be worth a lot more someday.