Diversify your portfolio with stamps and autographs

Diversify your portfolio with stamps and autographs
17 May 2012

AS YOU switched on the business news this morning, did you get that familiar feeling of dread? Is gold down yet further? Has the strong start to the year for the stock market come off the rails?

After 11 years of strong gains, gold is no longer a ‘sure thing’. It’s down 13% since August 2011, with $250 gone in value from a high of $1,900.

And after Standard & Poor’s 500 index enjoyed its strongest January since 1987, the benchmark index posted a 0.7% loss in April.

Goldman Sachs said in a recent research note: “Our general view is that the US seems to be slowing – though how much and for how long is an open question.” An open question about sums it up. Attempting to make sense of the movements of the stock market or the future direction of gold can put you off your corn flakes.

I’m not saying that investing in equities, gold or bonds is a bad idea. When done right, they can be the mainstays of a successful investment portfolio. Yet, with such uncertainty around, it is vital to have as diverse a portfolio as possible to spread the risk and iron out the troughs.

Why collectibles?

Do alternative investments make up 8% of your portfolio? The latest World Wealth Report, courtesy of Capgemini and Merrill Lynch Global Wealth Management, suggests that high-net worth individuals should devote 8% of their portfolio to alternative investments this year, up from 5% in 2010.

Many people think of collectibles as unreliable, frivolous investments. Far from frivolous, the historical price rises offered by top-grade collectibles make them one of the most reliable, and enjoyable areas of investment.

Tangible assets like these don’t plummet in value overnight. Let’s look at a couple of examples...

1840 2d Blue stamp

The 30 most desirable classic stamps from Great Britain are up 11% per year in value since 1998.

You can do even better. The 1840 2d Blue was issued on the same day as the more famous Penny Black. Yet it is far rarer than its illustrious cousin. Just 100 to 200 examples of the stamp exist.

If you can get your hands on a pristine condition specimen, don’t hesitate. Top examples, worth $25,970 in 2007, were valued at $51,940 last year – equal to a rise of 14.9% per year.

Neil Armstrong’s autograph

The world’s 40 most valuable signatures have risen in value by 14.8% per year since 2000, according to the PFC40 Autograph Index. You could invest in Marilyn Monroe (up 7.82% per year), or John F Kennedy (up 13.6% a year).

If you only invest in one autograph, make sure it’s Neil Armstrong’s. The first man on the moon is the world’s most valuable living signature. Since 2000 his autograph has risen in value from $890 to $9,660 – that's 24.2% a year.

Armstrong stopped signing in 1994, making his autograph extremely rare, and with his place in history secure his signature will always be in demand. When he is no longer around to sign, his autograph will soar in value, as demand reaches a new level.

These are just two examples. Other potentially successful investments include rare coins, antique books and music memorabilia. Go on, get collecting!

Pic credit: Paul Fraser Collectibles

Have you dabbled in collectibles or are you a seasoned collector? Share your stories with cashy...


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Collectibles expert and dealer
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