Astute investors can beat inflation by collecting space autographs
As inflation stays high, alternative investments such as astronauts' autographs look increasingly attractive
The Office for National Statistics' Consumer Prices Index today revealed that inflation dropped in March for the first time since July 2010, down 0.4% to 4%. Despite the slight fall, the rate of inflation remains double the Bank of England's target and continues to cause difficulties for investors.
While the cost of living remains high, most people are finding their ability to save and invest continues to be hampered by the Bank of England's unwillingness to raise interest rates above 0.5%.
This means that many investors who would previously have stuck with ISAs and high paying savings accounts are turning to alternative investment avenues, with many tempted by the recent £500 rise to the tax-free threshold for capital gains tax.
In February the pecuniary information service Moneyfacts revealed that basic rate tax payers - those paying up to £35,000 in taxable income - have a choice of just eight Individual Savings Accounts (ISAs) that nullify the impact of inflation.
And there's worse news for those top earners paying the 40% or 50% rate of tax, with no ISAs capable of stemming the flow of price rises.
In contrast, the PFC40 autograph index, which detailed the 2000-2010 price performance of 40 of the most sought-after celebrity autographs, revealed an average compound increase of 15.86% a year, with top performer Neil Armstrong showing a 900% rise during the decade.
Space-related signatures of all types can be strong performers in the alternative investment markets. An Apollo 11 photograph with the signatures of all three crew members increased in value by 347.5% between 2000 and 2010; rising from £2,000 to £8,950.
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· $5,000 Apollo 11 autograph shows space is definitely the place for Armstrong fans | 12 November 2010
Neil Armstrong's sought-after signature has once again proved a hit with collectors and investors