I'm always reading about how risk averse you are. Then I hear descriptions of buying at prices I would never pay and selling at prices where I rarely find buyers. Any investment in Magic too risky to be considered suitable for the "risk averse". We have very little control over supply, and any card that meets with universal appeal is likely to meet an unequivocal banning. Occasionally supply and demand is predictable enough to grind out profits, but even then the MtG investor has very small windows of opportunity in which to make reasonable purchases and profitable sales.
Generally, most probably consider my style aggressive because I pick up cheap cards with little to no attention paid to their rarity. I want to own playable cards and I want to own them at prices that let me ignore number of reprints or any potential banning, and sell on my schedule.
When did you first trade MtG for profit? Did you receive or give up cash? Was it simple a trade for cards you needed to put in a deck? Unfortunately, the most informative Magic investments are rarely our found among those early trades. Recently I bought a collection of 25k cards for a little less than $850. A month later, having moved into a new place in the meantime, I am finally in the black and sitting on well over 24k worth of cards. I bought this collection knowing it contained some high dollar singles, but it was the huge amount of Mercadian Masks and Nemesis product the original owner had opened that made this a snap pick up. Confused? Today Card Kingdom is buying Masks Brainstorms for 75 cents, Cape Fear Games buys Masks Dark Rituals at 10 cents, and Flame Rift has online dealers offering 45 cents.
What Does This All Mean?
Here is a valuable lesson for your MtG investments: play-ability trumps all. That lesson is hard to learn grinding out singles at FNM, even if you are just looking to trade out stuff you can't buylist for things you can. Looking at someone's binder is not going to find you fifty copies of Brainstorm. Looking over a collection will show you where most of the value in MtG investing is really hiding.
Ideally, buying collections is a good place to start. Generally, you'll find better deals buying collections than you would anywhere else and you'll train your eye to catch those collections where a player happened to put together multiple copies of very liquid commons and uncommons just by playing at the right time. Someone selling a collection is going to find most of their high profile cards, but they are also just as likely to pass over their hundred dark rituals as worthless just because THEY have so many. There is another lesson here for the MtG investor: strong sets are worth investing deeply into.
Rather than judge a set on its rares and mythics, look for play-able commons and uncommons. A deep set has at least three cards at these rarities that demand play in either Modern, Legacy or Vintage. Recently, Wizards gave us New Phyrexia. Here we have a powerful new mechanic stuffed into a tiny set that bomb mythics and the ultimate utility rares. All this comes with Beast Within, Blighted Agent, Despise, Dismember, Gitaxian Probe, Gut Shot, Mental Misstep, Mutagenic Growth, Shrine of Burning Rage, Dispatch, Tezzeret's Gambit and Vapor Snag. Buying New Phyrexia sealed product should have been obvious to most. Instead, speculators argued about particular cards to buy into. The inevitable [card]Mental Misstep[card] banning hurt singles investors much more than just it hurt the guy buying a case of New Phyrexia.
Buying sealed product is probably the simplest way to invest in MtG. Obtaining booster boxes is an exercise in finding truly deep sets, favoring smaller sets because they provide density and being patient. Allow yourself the dilemma of figuring out if you should be opening and breaking down sealed product or just flipping it. With Planechase, Duel Decks and similarly fixed products you might think this an easy decision, but the MtG market is very inefficient. The same buylist will pay more for the contexts of a Duel Deck than they will for the sealed product, for example. Generally, I take this as a hold signal. I am in no hurry to sell products dealers can't price appropriately. Unless I can find a buyer offering much more than dealers, I am content to just sit on the stuff.
If you feel you've exhausted the collection and sealed product markets and are ready for a triumphant return to buying and selling singles for profit remember the whole inefficient MtG market thing. While selling cards from the 25k collection I came across at least three instances with a negative spread. That is to say, TCG was selling copies for less than dealers were buying. I was able to buylist a foil Flame Rift to ABUgames for $17, and today copies are still for sale at TCG for just $15 (Cape Fear's buylist price btw). You shouldn't be paying anything near TCG for cards, unless that TCG price is less than a dealer's buy price.
Turning Theory into Practice
I view the purchase and sale of singles as the riskiest type of investment MtG investment and that means I want bigger returns here than anywhere else. That means buying up playable foils and low print run stuff at or below buylist and waiting for the right buyer. ABUgames did not buy my foil Flame Rift to sell it for a loss, they know there IS a market for this stuff and they know where to find it: Big MtG events. If you want to find buyers for things you can't seem to move locally, that also have strong online pricing, then you need to go to more events. There you will find stores offering competing bids for your cards, offering competing pricing for your cash and every type of Magic player in the game with whom you can buy/sell/trade.
Don't be content with your local Magic scene as the primary source of your sales. Instead, acquire things locally no one is playing, knowing there are enough buyers online and at larger events. If you ever feel like your plays in singles are drying up, take a quick look at finished Ebay auctions. How does the price for cards compare between Ebay and TCG? As long as auctions are ending higher than the deals you can find on TCG, you can be comfortable in the knowledge that most of the sellers are distressed. Take advantage, and if you feel you've got to pay more than buylist for anything - have your buyer in mind already.
Even though I admit that sealed stuff is the easiest way to invest in MtG, the benifits of collection buying make it my favorite investment vehicle. Feel like you missed out buying New Phyrexia sealed stuff? buy a player's collection that started and finished around that time. Think your Champions Gold Bordered Decks were worthless? Be thankful you found ABUgames buying everything in those boxes, including basic lands, at well above bulk. Since buying sealed is cost prohibitive and collections are less common you'll often be looking in someone's binder for a deal. I think that's fine when trading cards for cards, but when cash can go so much further I wish people would be much more aggressive floating buyout offers for stuff in binders. I think plenty of players just want to open another pack and paying below buylist for a shockland lets them do just that.