When some rare first-edition Pokemon trading cards went on sale three years ago, Adam O鈥橞rien was hit with a wave of nostalgia. For the now 32-year-old, it was an irresistible offer that had the potential for value in the long run.

It was a bit of a gamble, spending $100,000 for three packs of cards. But it paid off: two of them combined were worth more than what he paid.

鈥淥ne could argue the Pokemon cards and trading cards are a better place to store your value than something like the U.S. dollar, just given the scarce properties of the cards,鈥� said the Edmonton resident in an interview.

Alternative investments 鈥� assets other than stocks and bonds 鈥� may bring to mind hedge funds or real estate. But for millennials and generation Z, indulging in niche collectibles such as limited-edition shoes, handbags or trading cards is another way non-traditional investing has taken shape.

The popularity of trading cards grew during the pandemic when people were looking to invest time and money in hobbies, said Patrick O鈥橬eill, senior vice-president of sales and business development at NFP Canada. That interest drove up prices, and people who owned cards and memorabilia saw the value of their possessions surge.

鈥淚t was going up a lot faster than inflation or investments in the stock market 鈥� very comparable to art, sculptures, fine wine or expensive jewelry,鈥� O鈥橬eill recollected.

He said the shift in price and value attracted younger generations to invest in memorabilia.

鈥淔or the young people, it鈥檚 teaching them life lessons at a very early age 鈥� even investment,鈥� he said.

O鈥橬eill, who is in his 60s, has been collecting hockey and game cards for five decades. For him, it was about nostalgia when he first stepped into the space.

鈥淣ow, you鈥檝e got people that have that interest (of nostalgia) but also the interest of being an investor,鈥� he said.

O鈥橬eill said his cards are now worth about $50,000.

Earlier this year, a case of old unopened hockey cards likely featuring Wayne Gretzky in his rookie season fetched more than $3.7 million after it was uncovered in a Regina home.

The winning bidder bought the case of 16 sealed boxes of O-Pee-Chee鈥檚 1979 hockey card collection, amounting to more than 10,000 cards, Heritage Auctions said.

The auctioneer says the case could include 25 or more highly coveted Wayne Gretzky rookie cards.

But placing value on niche alternative investments such as wine bottles, designer bags or sporting cards can be difficult.

O鈥橬eill said it鈥檚 hard to value sporting or trading cards unless they are professionally graded, which means assessing physical conditions such as fades, creases or residue.

To preserve the value of his rare edition, high-value Pokemon cards, O鈥橞rien has stored them safely in a locker.

鈥淭hey鈥檙e stored in a fireproof vault, definitely not in my house,鈥� he said. 鈥淭hey鈥檙e stored in the same way that you鈥檇 store bricks of gold.鈥�

For other items, factors like rarity, circumstance and sentiments play a strong role in determining the value. And the amount can fluctuate widely.

鈥淭he valuation is literally what the next person will pay for it,鈥� said Scott Blair, chief investment officer at CWB Wealth. 鈥淚t鈥檚 not a liquid market.鈥�

While some alternative investments can return a good value, it is also a risky bet, Blair said.

It鈥檚 hard to determine the value of niche alternative assets similar to a mainstream investment, such as corporate shares, because there are no quarterly appraisals, cash flows or earnings to quantify the asset, he said.

鈥淧okemon cards, sports cards, memorabilia 鈥� a lot of it is tied to emotions,鈥� Blair said.

鈥淚f in 20 years nobody really cares about Pokemon cards, then you might have spent hundreds of thousands of dollars only to find out that it鈥檚 not worth anything,鈥� he said.

鈥淭here is a huge risk that as you go through time, it (could) just fall out of favour.鈥�

But valuations can be a little more calculative if done right.

Music royalties, for example, prove a good alternative investment depending on streaming patterns. It might also be worth considering the age of the musician, said James Burron, co-founder of the Canadian Association of Alternative Strategies and Assets.

鈥淕ordon Lightfoot just passed on 鈥� then, everyone was playing Gordon Lightfoot (songs),鈥� Burron said. 鈥淭hat would be a kick in the royalties.鈥�

Burron, who owns vintage Wolverine cards, says the key to investing in niche alternative assets is to not put all eggs in one basket, instead diversify across markets.

鈥淚f you just have alternatives, then you actually have a more risky portfolio than if you add some of stocks,鈥� he said.

Stocks and bonds are also not correlated to the alternative assets market, Burron said. That means economic elements such as inflation won鈥檛 affect alternative investments the same way as mainstream investments.

For O鈥橞rien, buying the Pokemon cards has been a learning experience.

Three years after the purchase, his collection value has dropped 20 per cent. O鈥橞rien said he has moved away from memorabilia.

鈥淚 don鈥檛 see that long-term value sustaining,鈥� he said of his collection.