new examine means that investing in LEGOs is extra worthwhile than gold
toys prove to be better investment than gold
to anyone who thinks that LEGOs are just a toy for kids, think again… a new study has found that investing in these plastic blocks will bring greater profits than if you had put the same money into gold.
in fact, according to researchers at the higher school of economy (HSE) in moscow, prices of retired LEGO sets grow by 11% annually, which is higher than the average returns provided by gold and large stocks.
images courtesy of LEGO
led by associate professor victoria dobrynskaya, a group of researchers at the HSE university (find more here), studied financial returns on alternative collectible investment assets, such as toys, using LEGO brick sets as an example. such iconic toys with diminishing over time supply and high collectible values appear to yield high returns on the secondary market. the team found that LEGO investments outperform large stocks, bonds, gold, and alternative investments, yielding an average return of at least 11% (8% in real terms) in the sample period 1987–2015.
LEGO returns are not exposed to market, value, momentum, and volatility risk factors but have an almost unit exposure to the size factor. A positive multifactor alpha of 4%–5%, a Sharpe ratio of 0.4, a positive return skewness, and low exposure to standard risk factors make the LEGO toy and other similar collectibles an attractive alternative investment with good diversification potential.
myrto katsikopoulou I designboom
dec 15, 2021
