Filed Under:Markets, E&S/Specialty

The Beatles vs. The Stock Market

High-net-worth investors have turned to fine art & collectibles while the financial markets recover

Autographs of The Beatles and drawings and handwritten lyrics by John Lennon have sold at auction in recent years for “very impressive amounts,” says Maureen McCarthy, director of Imagine the Art of John Lennon Gallery in Sydney, Australia. She is the local agent for Australia and South East Asia of Bag One Arts Inc., the licensing and publishing arm of the estate of John Lennon under the direction of Yoko Ono.

Increased interest in fine art through the recession has kept values increasing, making art and collectibles “a much better investment” in the last five years than the stock market, says Bill Gatewood, head of the Personal Liabilities Division at Burns & Wilcox. Art indices since 2008 have shown better results than the Standard & Poor’s index, while the Dow has been “very sluggish” until the last year or so, which has had an impact on the value of art, Gatewood says.

Art is “increasingly” becoming a vehicle for investment because of its high appreciation and few requirements to obtaining and holding a piece, says Jennifer Schipf, vice president and senior underwriter of XL Group’s North American-based Fine Art and Specie operations. “The appreciation of values is what makes it a nice investment,” Schipf says. Most major banks have a lending practice against fine art as collateral. “As underwriters, we have to be careful to understand the risks that we’re actually writing and not take things at face value.”

Continue reading to see artwork by former Beatle John Lennon that is currently on sale.

According to Fraser’s 100 Rare Autograph Index, the market for items autographed by all four members of The Beatles has risen from £4,950 in 1997 to £24,500 in 2011, an increase of 394.9 percent. Meanwhile, an autographed album page by John Lennon alone rose from a suggested price of £675 in 1997 to £6,250 in 2011, an increase of some 825.9 percent.

Handwritten lyrics to "Revolution," by John Lennon

A strong worldwide interest in The Beatles and in particular, John Lennon, is fostering a huge potential market for Lennon’s artwork, says Maureen McCarthy, director of Imagine the Art of John Lennon Gallery in Sydney, Australia.

"We Made Our Bed," depicting the 1969 Bed In for Peace at the Amsterdam Hilton, by John Lennon

The growing client base for Beatles memorabilia and John Lennon fine art prints is due to new young fans, as evidenced on social media sites attached to Imagine the Art of John Lennon Gallery in Sydney, Australia. That “augers well” for continuing long-term interest in the works of John Lennon, says Director Maureen McCarthy.

Handwritten lyrics to "Imagine" by John Lennon

Clients purchase the artwork of John Lennon out of love rather than investment, and do not plan to resell them. Yet as interest grows in the art world and in works by The Beatles and Lennon in general, the cost of Beatles and Lennon memorabilia is rising.

"I Do," a recreation of John and Yoko Ono exchanging vows, by John Lennon

In recent years John Lennon’s original drawings and handwritten song manuscripts have garnered prices well over $1 million, possibly causing some art collectors to look to his artwork as an investment opportunity.

"Lennon Broadhurst," a series of self-portraits by John Lennon

The limited edition fine art prints of Lennon’s drawings and song manuscripts published by the estate of John Lennon are priced at $600 at first released for sale. As the print edition sells through, the price is increased and a print that is sold out may be priced at $8,000.

"Let's Have a Dream," depicting John with wife Yoko Ono and son Sean Lennon, by John Lennon

Only 300 numbered prints are available for sale worldwide in each limited edition of Lennon’s drawings, and just 1,000 numbered prints are available of the handwritten song lyrics.

A popular Lennon print or lyric sheet may sell out very quickly—in a couple of years—increasing their value due to limited availability. More often than not, fans that have collected these works are not interested in reselling them.

"Love," depicting Yoko Ono and Sean, by John Lennon

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