INTRO Investing in video game economies is both similar and different than investing in real world economies like the stock market. The key difference is that in an MMO, you have the same access to information as the next player (Unless they got the ANET connections). You get news about patches and releases the same time as every other player, and best of all, all the information is located on reddit (leaks) or the gw2 website. How you use this information is a whole different matter, and this is what separates the kings from the peasants.
Rules about Investing Here are a few general rules to remember when investing Time is Money Before every investment, you have to ask yourself, what is the time frame for when you expect a return, and compare that to your opportunity cost. If you have nothing to do with your money, then don't worry about this. But if you could be using your money in better ways (such as flipping the TP), then this is a very important note to remember. I have seen many people sit on items such as gold ore or silver ore expecting some magical patch to introduce 500 jewelry, only to wait forever because there is absolutely no information about the time frame for it to come. If you don't have a time frame, don't invest. If you hate flipping and have no other use for your cash, put the money into some historical investments which I will explain later.
Supply and Demand Before you invest in an item, the first thing you must ask yourself is "what is, and what will be the supply" as well as "what is, and what will be the demand". Ask "what is" the supply and demand when thinking about actually buying the item. Will this item continue to be in demand in the future? How much supply is this item currently at, and what are the possibilities that this item will be reintroduced in the future? If you have increasing demand and decreasing supply, your item will naturally rise in price. The "Will this item will be reintroduced in the future" is a question that will be associated with gamblers, where I will explain later.
When to Sell Are you a safe investor? Or do you like to take risks and gamble? A safe investor will sell when they receive news of any possibility that their item's supply might be increased, or something that could happen that will decrease the demand of their item. For example, the people who sold their wind/fire/lightning catcher skins when the news that the festival of four winds was coming back were the safe sellers. There was absolutely no wording in the announcement that those specific skins were being reintroduced, but those who sold took what they've already made and moved on to other investments. The rule of the thumb is to minimize your risks, and move on to other investments (which could be seen as new opportunities).
Analyze Historical Prices This rule could not have applied a year ago, but it does now since GW2 is now more than 2 years old. You know have access to over 2 years worth of data and statistics, and a lot of this could be utilized when making smart investments. For example, the general trend with many holiday items is that their lowest prices are during the middle of the events that introduced them, and their highest prices were the months that followed (new supply is gone, old supply is diminishing). This is what makes items such as BL Skins and Holiday skins/materials so valuable of investments. If you have nothing better to invest in, invest in holiday items because at most, they can only be reintroduced once a year. This means, the peak price will always occur somewhere between the date of the event and the date of next years event.
Candy Corn vs. Quartz Crystals To touch off the previous point about holiday items and historical trends, the candy corn vs. quartz crystal example is one of my favorites when discussing what is the ideal investment. Both items are very similar (holiday exclusive materials), but there are key differences in why one is superior to the other. Quartz Crystal is reintroduced at least twice a year according to historical trends (Wintersday and Festival of Four Winds), though Wintersday is negligible given the little quartz it does drop. What is quartz crystals used for? Celestial armor (which is always in demand as new accs are made). Quartz is no longer obtainable in large amounts. Why is quartz a better investment than candy corn? To begin, lets highlight candy corn's good qualities. Candy corn is also used in large amounts, through the conversion to candy cobs which can be traded in for 20-slot bags (currently the cheapest 20-slot option). However, the glaring flaw in investing in candy corn is that it is easily available through maize balms, which turn ambients into monsters that drop trick'o treat bags, which drop candy corn. This is why even after the Halloween event, candy corn was still dropping, because new bags were still being opened.
http://www.gw2spidy.com/item/43773 http://www.gw2spidy.com/item/36041 As you can see, candy corn has remained relatively constant, and quartz has began a slow climb (But is still 300% of what it was when festival of four winds occurred).
The Gamble Finally, if you like to gamble, I've got something for you. I will not call this investing, because at the end of the day, it is straight up gambling. As I explained earlier, the most volatile time for holiday items is right before the holiday event patch. I will use Light of Dwayna as an example. The lowest price of Light of Dwayna was Wintersday 2013, http://www.gw2spidy.com/item/49480, right when they were introduced through gift boxes. After the event ended, the price of the recipe began to climb (since it was removed from the contents of the boxes after the event, compare this to candy corn, which stayed in its container's drop tables). Since light of Dwayna dropped during wintersday, there is always a chance it will drop on the next years wintersday. When it was revealed that it was NOT dropped on the next wintersday, the price shot up nearly 500%. If you want to gamble, invest in items right before their possible reintroduction date, and depending on your luck, you will either go big or go broke (Light of dwayna could have easily dropped to 5-10g if reintroduced).
CONCLUSION I know I only used a few examples for this post, but if you have spare time, study prices, because that is the best way to make money aside from flipping. Investing in items is always a risk, but depending on the magnitude of the risk, you could make a lot of money. That being said, there is nothing in GW2 that is a truly safe investment, because patches introduced constantly, and new possibly better items are added on the whim. The only safe investment I would consider is buying holiday items during their events and selling 6-9 months later when it is at its peak. The 15% TP tax is also a problem, because you have to make sure you make at least 15% of your investment back before you can count anything as profits. 15% in the real world is HUGE if you are dealing with stock markets (since the 15% capital gains tax is calculated from your PROFITS, not your initial investments). I also trade stocks in real life, but I am just a poor college student so I cannot compare those endeavors with the magnitude of investments I do on GW2.
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