Investing in CGC Graded Comics - Is Higher Grade Better?
Almost from the beginning of CGC encapsulation, collectors of modern age comic books have touted CGC 9.8 as the only grade choice for serious collectors and for investing. For older comics, message boards and social media groups have decades of investment advice similar to “buy the highest CGC grade you can afford.” Is this expert advice believed to be wisdom for the masses as wise as it would seem? Collectors should always follow their own preferences when it comes to the books chosen for their collections, but investing isn’t just a matter of taste when there are numbers available to test.
CGC 9.8 OR NOTHING – GOOD ADVICE?
Amazing Spider-Man #300 (1988) is the most submitted with over 27,400 copies graded. CGC began grading comic books in 2000, and the CGC market had been established and stabilizing for five years by 2005. The 2021 average sales prices for all CGC grades of Amazing Spider-Man #300 have increased since 2005, but the advice to invest in CGC 9.8 rather than any other CGC grade would have actually produced the lowest gains.
An investment of $679 in 2005 could have purchased one copy of CGC 9.8 Amazing Spider-Man #300, while an investment of $675 could have purchased 13 copies of CGC 8.5 Amazing Spider-Man #300. The average prices paid in 2021 would have the CGC 9.8 investment (one copy) valued at $6,116 and the CGC 8.5 investment (13 copies) valued at $9,321. If it had been possible to purchase 25 copies of CGC 7.0 Amazing Spider-Man #300 for an average of $27 each, the returns would have been even higher.
An additional consideration is that owning a single copy of CGC 9.8 Amazing Spider-Man #300 could only be “cashed out” by selling the book and no longer having the book in the collection, while owning 13 copies of CGC 8.5 Amazing Spider-Man #300 could be “cashed out” by selling one, two, or even twelve copies of the book, while retaining a copy within the collection.
Perhaps the CGC 9.8 advice would have been more appropriate in 2010, rather than 2005.
In the case of 2010 prices, CGC 9.8 outperformed CGC 9.2, CGC 9.4, and CGC 9.6 in 2021, but every other grade was a better investment percentage-wise than CGC 9.8 for Amazing Spider-Man #300. An investment of $611 in 2010 could have purchased one copy of CGC 9.8 Amazing Spider-Man #300, while an investment of $585 could have purchased 9 copies of CGC 8.5 Amazing Spider-Man #300. The average prices paid in 2021 would have the CGC 9.8 investment (one copy) valued at $6,116 and the CGC 8.5 investment (9 copies) valued at $6,453. Once again, purchasing even lower graded copies would have produced higher returns.
As in the 2005 example, owning a single copy of CGC 9.8 Amazing Spider-Man #300 could only be “cashed out” by selling the book and no longer having the book in the collection, while owning 9 copies of CGC 8.5 Amazing Spider-Man #300 could be “cashed out” by selling up to eight copies of the book, while retaining a copy within the collection.
Collectors always have personal preferences when it comes to the books in their collections, but investment advice can be reviewed and tested with numbers long after the advice was given. Amazing Spider-Man #300 disproves the suggested rule of “CGC 9.8 or nothing” for modern comics, using the most submitted book in the CGC Census.
HIGHEST AFFORDABLE GRADE ADVICE
Incredible Hulk #181 (1974) is an example of a very popular CGC submission but has generally been out of the price range for most collectors when it comes to CGC 9.8. The advice most often cited for investing in more expensive CGC graded comic books is to “buy the highest graded copy you can afford”, but would that advice have produced the higher return?
The highest returns for CGC graded Incredible Hulk #181 from 2005 investments would be for CGC 4.5 copies, increasing more than 2,000% between 2005 and 2021. The next highest returns would have occurred in grades nearest to CGC 4.5, from CGC 3.0 to CGC 6.0. In fact, the higher the grade invested in 2005, the lower the returns. Once again, the investment advice of the majority (or at least the most vocal) would have been wrong. It’s hard to complain about gains, and all grades of CGC Hulk #181 increased in value from 2005 to 2021, but the returns are clearly highest in the middle and lower end of the grading scale and not at “the highest affordable grade” as recommended.
Applying the same “highest affordable grade” advice to investing in Hulk #181 in 2010 would have produced similar results. The highest returns were again seen in grades CGC 3.0 to CGC 6.0, and the return rates decreased as the grade selected above CGC 5.0 increased. Collectors may always prefer the appearance of higher graded copies but investing uses the numbers and rates of return.
WHAT ABOUT KEY ISSUES?
Comic book investment often focuses on more traditional key issues, particularly those from the Golden Age and Silver Age. Golden Age key issues may sell only a few times per year, and there may be decades between two sales of the same CGC grade. An investment of $1,500,000 in 2010 for CGC 8.5 Action Comics #1 would have seen a return of +116% eleven years later with the $3,250,000 sale in 2021, but a CGC 3.0 Action Comics #1 also sold in 2021 for $1,300,000 after being purchased for $300,000 eleven years earlier, for a return of +333%. The highest grades for Action Comics #1 may grab the most headlines, but the year-to-year investment return was higher for lower grade copies of the all-time most valuable comic book.
Unlike Golden Age comics, CGC graded Silver Age key issues are sold more often because thousands of copies have been CGC graded. The frequency of Silver Age sales allows for comparing the 2005 recorded sale prices for key issues at varying CGC grades to their 2021 (or most recent) sales. As shown in the analysis, there is significant evidence that the highest investment returns are rarely, if ever, associated with the highest CGC grades.
For the ten Silver Age key issues selected, the highest rate of return was seen for CGC 5.0 or lower eight times. Only Amazing Fantasy #15 had a highest rate of return above CGC 7.0, with a $25,000 investment in CGC 8.5 in 2005 resulting in a massive +2,740% return in 2021. Selecting a grade higher than CGC 8.5 in 2005 for Amazing Fantasy #15 would have produced less than half the rate of return of CGC 2.0, and almost one-third of the returns of CGC 6.0.
All speculative investments have the potential for money to be lost. While none of the 2005 prices paid in this analysis resulted in losses using 2021 recorded sales averages, there is no guarantee that higher prices paid in the past couple of years won’t see a downturn in the future. This analysis was intended to test the investment advice that has been commonly repeated for CGC graded comics. The suggestion that CGC 9.8 is the only worthy investment grade for modern comics, or that investment in older comic books should be driven by the highest affordable grade has been silenced by the numbers. Whether the advice will be silenced in the market is yet to be seen. Old habits die hard.
