Are Sports Autographs a Good Investment?

Are Sports Autographs a Good Investment?
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Any investment can be a great investment if you buy low and sell high. It helps with sports memorabilia if you can pick the right player at the right time and choose the players with long-term name recognition. However, sports autographs can be a terrible investment if you pay a lot of money for the signature of a player who goes to jail or admits drug abuse.

Memorabilia Vs. Collectibles

If you're considering investing in sports autographs, note the difference between sports memorabilia and sports collectibles. Sports memorabilia has been authenticated by a reputable dealer, who certifies that the autograph is legitimate. It's a $5 billion global market in which millions of collectors participate by buying and selling photos, cards, jerseys, balls and other related sports equipment. Anything else containing a sports autograph is considered a collectible that's nice to own for personal reasons, not financial reasons.

Potential Appreciation and Depreciation

If you have the right player's autograph on the right piece of equipment at the right time, sports memorabilia can be a great investment. For example, a rare, mint-condition tobacco card sold in 1992 for $451,000. It sold again in 2008 for $2.8 million, an increase of 521 percent over 13 years. However, if you were the collector who paid $3 million in 1999 for the home run ball that Mark McGwire hit to break the home run record, you'd be lucky if you could sell the ball today for $100,000 after McGwire subsequently admitted to using steroids.

Advice to Investors

An article in The Fiscal Times calls sports memorabilia investing an oddball idea that can make you money. The president and CEO of Legendary Auctions advises collectors to invest in a single high-end memorabilia items instead of multiple lower-end items because high-end memorabilia can have tremendous appreciation. He also cautions against buying any memorabilia from 1980 or later because mass production has made memorabilia less valuable than items from earlier years.

Keys to Success

According to U.S. News and World Report, to be a successful sports memorabilia investor you should have a talent for correctly predicting which of today's players will be in high demand in the future. You also need a talent for spotting the difference between players who will be temporarily popular and those whose popularity will continue to make their memorabilia items appreciate well into the future. Finally, character counts as well. An athlete who gets caught taking performance-enhancing drugs or is involved in an off-field scandal can have the value of their autographed sports memorabilia drop considerably.