Yesterday in the UK, interest rates were again held at a pretty miserable 0.5%.
At the end of spring time, many were optimistic about the rates rising again. But a number of problems on both sides of the Atlantic have proved to be more intractable than hoped, and growth remains sluggish at best.
Nor is anyone very hopeful that the rates will rise anytime soon. In fact, some analysts reckon that the rate will stay at 0.5% until 2013.
Of course, that’s not bad news all round. If you’re paying back a mortgage, then 0.5% is a very nice number…
But if you’ve got £6,000 in your bank account then, with 0.5% interest, you can expect it to build-up to the dizzy heights of, um, £6,030 by next year.
Not great is it? And you’d be right to scratch your head and wonder if there might possibly be something better out there…
For example, you might consider buying a letter written and signed by Albert Einstein, such as the one we sold a few months back. According to the industry’s PFC40 index, the value of a typical Einstein letter increased by 15.83% (from £6,000 to £6,950) in the last 12 months.
Signed photo of Einstein available on our website
That’s not the most spectacular increase. The average value of a Michael Jackson signed photo rose by 60% between 2010 and 2011 (although it won’t do that every year).
While the 0.5% interest rate is influenced by ongoing market factors, collectibles values are driven by supply and demand with an army of passionate worldwide buyers. These people want the pleasure of owning a Picasso, pieces of Jackson memorabilia, or a rare coin or stamp.
What’s more, the number of these collectors is growing worldwide. Not least in China and India’s emerging economies. Eastern buyers are pushing up collectibles values to new World Record prices, both at home and abroad (thanks to telephone and online bidding).
With a letter by a globally-respected figure like Einstein, you know you’ve got something that will always be coveted. After all, it’s unlikely that the world-at-large will suddenly decide that Einstein was really just a boring old fart all along…
His letters are, and will always be, vital pieces of history, They are worthy of the finest collections or even museums. Einstein will never be boring.
Sadly, things like interest rates always will be. But that’s why investors are getting bored of traditional investments and turning to collectibles…
And if you haven’t gotten involved in collectibles yourself, then I’m afraid you’re definitely missing out.