Investing in autographs and the best way to go about it

Investing in autographs could be an alternative asset class for investors seeking out more resilient opportunities for their portfolio. Are they a worthwhile investment?

 Investing in autographs

Winston Churchill: investing in autographs is like investing in history

Recent events have highlighted the importance of investors having a diverse portfolio to shield themselves against the unexpected. Alternative investments can provide some much-needed resilience in a portfolio. Autographs are a particularly underrated alternative asset class, yet they offer an impressively consistent value growth rate and are guarded against the volatility of more traditional markets.However, autographs and other signed documents are an investment like any other—it’s about spotting the right opportunities and carrying out due diligence.

Why autographs?

Dedicated autograph collectors often rhapsodise about the feeling of pride and excitement that comes with owning a piece of history or an item signed by somebody they admire. But the value of autographs is more than just sentimental. There are a number of reasons why autographs make excellent investment opportunities for those seeking more reliable returns.

Invulnerable to market volatility

Like other alternative asset classes—such as fine wine, art or classic cars—rare and museum grade signed documents are unaffected by fluctuations in more traditional investment areas, such as stocks and real estate. Their value continues to grow even in unstable economic conditions, a characteristic that has made them all the more important in these uncertain times.

Ever increasing in value

The value of autographs has been on an incredible upward trajectory for decades now. The PCF40 Autograph Index, which tracks the performance of the 40 most regularly traded autographs in the world, recorded a 10% annual compound increase in value between 2000 and 2020.

Entry level investments

Compared to other asset classes, autographs are also relatively easy to get started with. There is no definite minimum investment amount that will determine the success of your portfolio and no technical knowledge required to identify the most profitable pieces. It’s about knowing what to look for in an autograph.

What you should steer clear of

Not all autographs are made equal. There are many types of signed documents that may hold immense personal value for the owner but are worth little to nothing as investment pieces.

These include signed memorabilia from footballers—which are notoriously tricky to verify and relatively easy to acquire—personalisations and even signed documents from iconic figures that are from a less interesting time period in their life.

For example, a signed photograph of David Bowie from the 1980s, when the icon admitted to being in a ‘creative slump’, was worth just £150 in 2013. Since his death in January 2016, the average value of his signature has increased by as much as 300%, but this period will still be of less interest to buyers than the 1970s, when his cultural influence was at its peak.

They’ll love me when I’m dead

Investing in autographs is somewhat of a morbid field. The value of a person’s signature jumps massively in the immediate aftermath of their death and, depending on their long-term legacy, may fall again once the world has moved on or continue increasing. For instance, the best-performing signature of 2018 was Stephen Hawking. His autograph’s value doubled from £15,000 to £30,000 following his death in March of that year.

So, is the answer to look for people who may be about to die? To a degree, yes. Investing in a person’s autograph while they are still alive and re-selling it after their death is the most common way of cashing in. But the most important factor will always be cultural relevance. If we’re looking at investing in the autographs of individuals from recent history, identifying the individuals that people will still be talking about in fifty or a hundred years’ time is the key to building a strong portfolio.

The rarer, the better

Another factor that can influence an autograph’s value is its rarity. Many entertainers and sportspeople routinely autographed thousands of photographs and collectibles during the peak of their careers, while world leaders would also sign countless documents during their stint in power. Their autographs are therefore fairly easy to acquire.

More desirable are signatures that are in short circulation, either because the signatory died young or refused to sign autographs. Neil Armstrong famously stopped signing autographs in 1994 when he realised people were only requesting them to sell on for a profit. After his death in 2012, the value of his autograph shot up from £550 to £7,500.

Similarly, the PCF40 Autograph Index 2020 cites Steve Jobs’ signature as the best performer of the 21st century, with its value increasing 24% per annum since 2000. The cultural impact of Apple, Jobs’ early death in 2011 from pancreatic cancer and his reluctance to sign autographs make his one of the most valuable at a whopping £40,000.

Owning a piece of history

The appetite for autographs is a cultural and historical one. One of a kind items signed by people who have changed the course of history are the holy grail of autograph investment. This where the sentimental and monetary excitement of trading in signed documents overlap.

The most expensive autographs ever sold at auction all fall into this category, most significantly George Washington’s signature on his personal copy of the Constitution, Bill of Rights, and the First Congress, which sold for £9.8m in 2012.

Correspondence between historical figures is another area of interest, particularly if the subject is a significant event or development. For example, a 1915 letter by Albert Einstein discussing the completion of his theory of relativity sold for £27,500. Museum-grade pieces like these are, for obvious reasons, the most expensive area for investors.

Who is on the rise?

There is no clear-cut method to identifying the right investment opportunities. It’s important to look out for individuals who have built or are building iconic status in their respective fields. In 2000, few people could have foreseen the enormous cultural impact of Apple, but in the years that followed, Steve Jobs carved out a place in history for himself. Now his autograph is worth £40,000.

Occasionally, it takes time for a person’s historical influence to be understood. Between 2018 and 2020, Kurt Cobain’s signature was the world’s best performing autograph. While he’s long been celebrated as a grunge icon, twenty years have passed since his death and he’s now being remembered as a key historical figure in 20th century music.

It’s also likely that the value of signatures by the surviving members of The Beatles will sky-rocket when they are no longer around. Paul McCartney already has one of the most valuable signatures of a living celebrity at £2,950 and Ringo Starr’s 2008 announcement that he was no longer signing memorabilia sent the value of his autograph soaring from £195 to £1,500.

For comparison, their bandmates’ signatures are among the most expensive in the world, a phenomenon that was propelled by their early deaths. After passing away at the turn of the century, George Harrison’s signature increased 17% per annum between 2000 and 2020 to £4,250 while John Lennon’s is the most expensive at £7,950.

Notes of caution

The biggest mistake people make when building a portfolio of autographs and other signed documents is trusting amateur sellers. The overwhelming majority of autographs found on resale websites are forgeries and worth nothing.

When individuals discover a potentially valuable document in their possession, the first step is usually getting it authenticated and appraised: they’re not just going to put it on a website and guess-timate the price themselves for risk of underselling the item’s worth. From the outset, a reputable authenticator is therefore involved.

Autographs are an accessible asset class, but they’re still an investment like any other. Exercising due diligence is a fundamental part of the process and this should entail using a reputable dealer that is registered with the Professional Autograph Dealers Association (PADA).

Further reading: Investing in Art as an asset class

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