The historical high returns of investment-grade, blue chip autographs are making inroads into the consciousness of even the most traditional of investors.

Editor's
note: Paul Fraser, author of this article, has been at the forefront of
the collectables scene for 35 years, having sold his first signed
record in 1978. He has sold stamps to the Royal Philatelic Collection
and the Smithsonian, and is among the world’s leading authorities on
rare autographs.

Diversification is king. As stock market uncertainty abounds, last
year’s Merrill Lynch Capgemini World Wealth Report revealed that high
net worth individuals intended to devote 8 per cent of their portfolio
to alternative investments this year.

And the historical high returns of investment-grade, blue chip
autographs are making inroads into the consciousness of even the most
traditional of investors.

According to the industry’s PFC40 Autograph Index, which tracks 40 of
the most sought-after historical and celebrity autographs, the sector
has seen a 14.84 per cent per annum increase between 2000 and 2011,
comfortably surpassing the Dow Jones index of equities during the same
period (under 1 per cent p.a).

Who were the big movers in 2011? They were:

-- Michael Jackson. A signed photo £1,200 (around $1,867) – up by 60 per cent between 2010 and 2011;

-- J K Rowling. A signed photo £1,500 – up by 25 per cent;

-- Albert Einstein. A handwritten signed letter £6,950 – up 16 per cent;  

-- Martin Luther King. A signed photo £3,950 – up 13 per cent.

The returns are impressive, and as we’ll see later it gets even more
exciting when you look at the longer term picture. But why are values
for this asset class on the rise?

Market catalysts

There is a growing global desire to own pieces of memorabilia
connected with history’s most famous names. Signed photographs and
signed correspondence are among the most immediate, and striking, pieces
around.

There are an estimated three million serious autograph and manuscript
collectors around the world. This number is growing, and values are
rising accordingly, due to three main catalysts.

Firstly, there are the baby boomers. Those born between 1946 and 1964
own 80 per cent of the world’s wealth. They grew up with many of the
cultural icons of the 1950s and 1960s (since 2000 Elvis autographs are
up 14 per cent p.a., Marilyn Monroe is up 7.83 per cent p.a. and JFK is
up 13.35 per cent p.a.), they have a considerable amount of disposable
wealth, and they’re retiring at an ever increasing rate – which means
more time to devote to the passions of their youth.

Secondly, there are Far East buyers. New wealth in Asia and China in
particular is firing the collectables market. More than 193,000
millionaires were created in the world’s fastest growing economy last
year, according to the Boston Consulting Group. The nouveau riches
in China are famed for their love of ostentatious displays of their
wealth, and rare autographs are proving a popular hunting ground.

Thirdly, there are investors. Forward-thinking investors are latching
on to the sector, aware of the considerable potential of passion
assets, and the autographs market in particular. These buyers view rare
signatures as more than simply wonderful items to own, they realise
their worth as part of a varied alternative investment strategy.

That is because in addition to rare autographs’ excellent long term
performance, as a leading tangible asset they also provide much-needed
security in times of high inflation and stock market volatility. Real
assets such as autographs have traditionally held their value in
economic downturns as they have a low correlation to traditional
investments. They’re also a terrific international commodity, enabling
autograph investors in weak economies to sell in stronger markets.

A simple equation

Coupled with an increasing demand for rare autographs is a finite
supply. Marilyn Monroe won’t sign any more photographs, nor will Winston
Churchill add his name to any more wartime correspondence. The “growing
demand + limited supply” equation rules this market.

What should you look for?

For those investors itching to get started with their own autograph
collection, here are a few final words of advice. Invest in only the
finest examples and the most high profile names – this is the way to
maximise returns.

The 50-year rule, which has stood me in good stead during my 35 years
in the business, always helps: will the man on the street know who this
person is in 50 years’ time? If so, chances are that they are a genuine
blue chip autograph investment. Here are five to seriously consider
right now.

Neil Armstrong. A signed photo £5,950 – up by 24.17 per cent p.a.
between 2000 and 2011. This is the world’s most valuable living
signature. Armstrong stopped signing in 1994, making his autograph
incredibly scarce. His place in the history of the world is secure – his memorabilia is for the ages.

The Beatles. A photo signed by all four members £24,000 – rose by
14.33 per cent p.a. between 2000 and 2011. Pioneers of pop music, the
most famous group of all time will remain a key player on the
memorabilia market so long as there is an appetite for good music.

John’s signature is the most valuable (£6,250, a rise of 22.10 per
cent p.a.), George’s grew the most between 2000 and 2011 (up by 26.10
per cent p.a. to £1,500) – a direct result of his death, but the Beatle
who made the most strides in the past year was Ringo. His autograph
soared by 25.16 per cent between 2010 and 2011, and is valued at just
£995. This price will increase dramatically upon his passing.

Muhammad Ali.  Signed photo £1,000 – up by 13.38 per cent p.a. between 2000 and 2011.

The world’s most undervalued signature. Voted the Sportsman of the Century by Sports illustrated,
his autograph will rise sharply in value when the bell tolls for the
last time. His memorabilia is already making waves. The trunks he wore
in his defeat to Joe Frazier in 1971 sold for $173,102 in November 2011,
an 8.25 per cent p.a. rise in value when compared with the $57,500 made
in 1997 for a pair of his trunks from his 1975 victory over George
Foreman.

Charles Dickens. A signed letter is worth £3,950 – up 15.69 per cent p.a. between 2000 and 2011.

Never out of print, countless adaptations every year, and a man
synonymous with the Victorian era. If this year’s 200th birthday
celebrations are anything to go on, the passion for the author shows no
sign of abating.

Napoleon. A signed letter for £4,500 is up 14.70 per cent p.a. between 2000 and 2011.

A man who shaped modern Europe, 200 years on Napoleon remains a name
immediately recognisable around the world. A letter written in English
by the Little Corporal sold for €325,000 at a major auction in June,
beating its estimate by over 300 per cent, evidence that historical
autographed documents can comfortably outperform the expectations of
even the most seasoned experts. The 200th anniversary of the Battle of
Waterloo in 2015 can only heighten demand.