A number of people have mentioned to me that they are looking to custom knives as an investment alternative, along the lines of other collectibles such as art, baseball cards, stamps, etc. I would like to share my thoughts.
First let me say that yes, custom knives can be a good investment. I, as well as many others, have been successful investing in knives. Conversely, many have lost money. It's much more complicated than someone advising you as to what knife makers’ knives to buy. You need to know not only what maker but which of their knives, what sources to by from and at what price.
I would not recommend that a new collector start investing in custom knives without doing research. As with other collectibles I believe it is best that you have a certain level of passion for the type of collectible you wish to invest in so that you will be motivated to take the time and make the effort to educate yourself about knives and the overall market. It is best to invest in what you understand. Do not rely solely on the advise of someone else. Seek advise from many others, check the various sales sites to see what is selling and at what price points, read the magazines and visit various internet forums dedicated to custom knives. Educate yourself.
Done correctly collecting knives for investment can be a rewarding experience and not just from a financial aspect. If you have a passion for the knives you invest in it brings a sense of pleasure to the endeavor. I have found that the majority of the people in the knife world are friendly and interesting. I have gained many new friends thanks to my involvement with custom knives. Searching for and finding knives one desires also provides a measure of satisfaction, the thrill of the hunt as they say.
OK so now you want to know how to find and purchase that $500 knife that will be worth $5000 in 10 years. Good luck, let’s all buy a lottery ticket. Well, the odds may be a bit better than that but it is a difficult proposition. Here are some factors that can help you identify that knife.
Identify makers that build quality knives (see the article on knife quality elsewhere on this site) and are new to knife making and have not yet been discovered.
Look for makers who are members of a guild or professional association such as the Knifemakers Guild or the American Bladesmith Association and are working to reach the next level of achievement within the organization. Reaching milestones such as these bring recognition and attention and substantiate that they are improving the quality of their work.
Find makers with good presence, i.e. ones with good personalities, that communicate well and are friendly. Makers with these characteristics are likely to be successful in building a following.
Identify makers that are good businessmen. Many a maker that builds a good knife are not good business people and will fail. Make sure a maker markets themselves well using shows, a good website, participates on forums and knows how to get published in the knife magazines.
Continue researching and pay attention to the knife magazines and knife forums to see who is getting positive attention.
Now that you know how to find the next superstar knifemaker what about a good solid investment in a proven performer. There are many makers that have established reputations and a good track record for making knives that hold or increase in value and there are a number of makers that have passed on but their knives continue to be a good value. The steps to identify and secure knives from these makers are similar to those required to find the new up and comers. Identify those that build quality knives, that are members of professional associations and have reached the top levels therein, makers that have good presence and are good businessmen and, most importantly, continue learning and follow the ongoing posting and sale of knives by those makers that you are interested in on the forums and dealer sites.
Some additional thoughts;
Unless you intend to turn the knife quickly, don’t buy what’s “hot” or trendy, trends are just that, things change.
Try to buy direct from makers, if possible, as you will likely get a better price than buying from someone reselling as they are usually trying to make a profit, though not always. Sometimes someone is just trying to raise funds and you might be looking at a good deal from a reseller. The only way to know the difference is by continually studying the market.
Be wary of relying solely on the advise of a dealer or, for that matter, anyone who is trying to sell you a knife, there is in inherent conflict of interest there. Most dealers rely on repeat business so they do have an incentive to provide you with good advice in order to obtain repeat business from you. Experienced dealers can be a great source of knowledge. Listen but verify, check other sources, make your own determination as to whether a dealers’ advice/price is right for you.
It doesn’t matter how proven a maker is from an investment prospective, if you pay too much it's not a good investment.
Don’t forget, at some point you will want to cash in that investment. Consider how you will go about selling your knife (consign it to a dealer, sell it yourself at a show or on a forum, auction house, sell outright to a dealer, etc…) and how much it will cost you to sell it.
Finally, buy what you personally enjoy so that it will be fun and worthwhile if you never make a nickel.