The booming signature market

Never mind the stock market - try the signature market. The value of autographs of the rich and famous has surged over the past decade, leaving equities trailing in the dust

According to Paul Fraser Collectibles, a firm tracking the market and acting in sales of such exotica, its PFC autograph index that tracks 40 of the most famous celebrity signatures has shown an average rise of 335.9 per cent in a 10-year period to 2010, chalking up an annual compound rise of almost 16 per cent

Just compare those figures with the 10-year annualised performance of the MSCI World Equity Index, of minus 0.24. Those figures reflect the damage wrought by the end of the dotcom boom and the financial crisis of 2008. When it comes to signatures versus stocks, it appears that the scribbles by famous people are a nice little earner. (And remember, the MSCI data looks even worse as it includes reinvested dividends, not just pure capital appreciation). Autographs have also comfortably outperformed property and even gold

The price of the top performing autograph rose by an astonishing 1053% in those ten years

How It Works

The  autograph market focuses on the trade of investment-grade memorabilia including  photos, documents, letter and books signed by historical figures, politicians,  classical and contemporary musicians, movie stars, sports and literary figures  and space explorers, among others. Items are available for purchase and resale  at auction houses, both brick-and-mortar and online, and through autograph  dealers

Who’s Investing?

Until  recent decades, the autograph market was dominated by hobbyists and historians  with limited means who collected for enjoyment’s sake. Today it has evolved into  a legitimate alternative investment strategy for an estimated 3 million collectors worldwide, a figure that’s expected to double over the next 20 years. The emerging economies of the BRIC nations (Brazil, Russia, India, China) and the rise in the number of millionaires in those countries, has fuelled the growth in numbers of serious investors in autographs. At the same time, the Baby Boomer generation is beginning to retire and pursue hobbies such as collecting. They naturally have a particular interest in subjects they loved in their youth, which has driven up the price of celebrities from the 1950s, 60s and 70s

What They’re Making

According to  Paul Fraser, autograph collection has a tremendous growth market fueled by  supply shortages and increased demand, especially in the case of the finest rare  and unique autographed memorabilia, which Fraser says have historically produced  annual returns up to 20%.

The PFC report highlights some astonishing figures. For example, Neil Armstrong, the first man to walk on the moon in 1969,stopped signing autographs in 1994. In 2000 his autograph was worth £550. Ten years later it was £5500, a rise of 900 per cent. The most valuable signature in terms of the price paid was that of the Beatles, on a photo – it fetched £22,500. Even that’s a mere pittance compared to Henry VIII whose letter  asking the Pope to annul his marriage to Catherine of Aragon is estimated to be able to fetch over £300,000 should it come up for auction

“The collectibles markets are booming with world record prices being set virtually every day. Much of this attention is on top-quality autographs, and historical signed documents, which have become favoured assets for investors seeking diversification from mainstream markets”, according to PFC

Find out more here

How to Get Started

If your capital is is limited you can always start by sending photos to your favourite celebrities by mail to have  them signed. Celebrity mailing addresses are available at websites like  Startiger.com, Yahoo’s A1 Autograph Group and Stefan’s Autographs. If  your resources exceed the price of a stamp, start browsing reputable online  auctions and catalogues, study whose signatures are selling for what and  compare the prices against valuation books. Many experts advise against buying  from members of exclusive autograph societies who sell at fixed prices since items from these sellers tend to be overvalued

When choosing which  celebrities to invest in, autographs from dead people may be the best way to  ensure safety as their reputations are already cemented and supply of their  merchandise will only continue to decrease. The rarer the items, from  one-of-a-kind to five-of-a-kind collectibles, fetch the best result

When you’re ready to make a purchase, visit an auction or a dealer like Paul  Fraser Collectibles or Stanley Gibbons, where you can browse by category. Right now  on the Fraser site, a Marilyn Monroe Autographed Magazine Cut-Out is for sale for £9,950

Caveat Emptor

Millions of pounds in fraudulent memorabilia is sold each year. Don’t  necessarily trust an autograph’s certificate of authenticity. They can be, and are, easily forged. Go to an expert third party such as didtheysignit or memorabilia.uk to have the signature authenticated

You should also be  aware of memorabilia signed with autopens, by proxy and with preprinted  signatures. While not technically fakes, these autographs are far less valuable

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April 05, 2012

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