Militaria: The investment you never thought of...

Most knowledgeable investors are aware of the fact that "collectibles" have always been a good hedge against inflation and have proven to be a sound investment with regard to capital gain. When they think of collectibles the usual antiques, stamps, coins, art, etc., readily come to mind. However, very few think of "militaria".

What is militaria? It's not even in my Webster's, so I'll define it myself. Basically it is any type of military or para-military collectible. This can range from weapons, uniforms, medals, badges, insignia, field gear, etc. If it's of military origin and people collect it, it's militaria.

There is someone out there who collects anything you can think of. If you looked hard enough, I'm sure you would find someone who collects, and wants to buy, combat boots of the Argentine army. I don't think they would be a very good investment however...

The most popular areas, or countries, for collectors are the United States, Great Britain, France, Japan, and Germany. While collectors can be found who are interested in all countries and time periods, perhaps the most popular period is World War II. Because this article is about investing, I'll concentrate on the area which has proven to be the best investment over the long run. Fortunately, this is the area I have collected for over 35 years...Third Reich Germany.

Even before the shooting had stopped in Europe, GI's were "liberating" souvenirs from German prisoners, and off the battle fields. Before long a brisk trade developed between the soldiers as they swapped items back and forth, not really knowing what they had or what they were doing, and basing their trades on an item’s purely personal appeal. For quite a few years after the war these souvenirs were sought by a few "hardcore" collectors. They appreciated the historical significance and the artistic qualities of the relics. Yes, a "Nazi" officer's full dress uniform can be a magnificent looking thing!

It was in the 1960’s that the hobby really "took off". What contributed most to its gaining popularity was that it was during this time that reference material started becoming available. Before then there was very little information available to the collectors. Reference books meant that a piece could be identified as to exactly what it was. The "old German jacket" was now a Panzer captain's parade tunic" and the "swastika pin" was now an N.S.D.A.P. membership pin in gold.

Now that collectors had some idea what they really had, they were able to start putting realistic values on their items. No longer would someone trade an Iron Cross 2nd Class (millions made) for a rare Army general's dress dagger. The hobby was becoming organized.

By the 1960s there were quite a few "dealers" who bought and sold German militaria either on a part time or, in some cases, a full time basis. Interest was increasing as more and more people (mostly men) realized what a fascinating hobby it was. As interest grew, demand grew, and as demand grew, prices grew. There was a steady rise in prices for the next 30 years.

A complete history of the hobby is beyond the scope of this article, so I'll skip forward. It's now 2007 and the prices demanded for German militaria have exploded! I would estimate that in the last 5 years most German militaria has increased in value 500%, and in some cases even more. Still the collectors can't seen to get enough and the prices keep going higher and higher with no end in sight. Some areas of the hobby have always been more popular than others. Among these are daggers, of which there are more varieties and variations than you can imagine, and the SS. I know; the evil SS! Let's face it, the bad guys are always more interesting than the good guys. After all, which would you rather own, the outfit worn by Luke Skywalker or the one worn by Darth Vader?

So, what does this mean to you as a potential investor? It could mean big profits in the long run. A rare medal, dagger or uniform bought today for $5000 could be worth $25,000 in a few years. That is, or course, if things keep going the way they are. Unlike the stock market, German militaria "never" goes down in value. I base that on many years in the hobby and personal experience. At worst, the increase will slow down for a time, but prices always keep moving up.

I'm not suggesting that you run right out and buy some "Nazi stuff" at the local flea market. On the contrary, caution is needed in this, as in all investing. There are some pitfalls for the "newbie" in our hobby.

Unfortunately, as the values of the collectibles have risen, so have the number and quality of the fakes or reproduction items. Spending big bucks on one of these as an investment could prove to be disastrous. Be careful! Here are some suggestions for an investor with limited knowledge of our hobby.

1. Buy quality. Don't buy pieces that are in poor condition. And don't buy low grade pieces. It would be better to buy one really fine item than a bunch of junk.

2. Make your purchase through a reputable dealer. This will require some homework on your part, but it will pay off in the long run. The internet is full of dealers, some good and some not so good. Check them out before dealing with them. Another place to find dealers is at "militaria shows" and gun shows. There are also several internet auctions. Again, be careful who you deal with.

3. You might want to get an experienced collector to act as an advisor. Make sure it's someone who does not have a financial interest in your possible purchase.

4. Be prepared to hold your investment for a while. Don't expect to buy it one day and sell it the next for a profit.

I can't guarantee you will make a killing by investing in Third Reich militaria... no one can. However, if you buy quality pieces at a fair price and hold them for a time, you should do very nicely!

This article was written to acquaint potential investors and collectors with the hobby of German militaria collecting . The author does no believe in, or support the ideals represented by these collectibles.

Bob Treend has been involved in militaria for over 35 years, as a dealer, auctioneer, publisher and collector. He has written and numerous articles of the many aspects of militaria collecting