Investing in music memorabilia
Investing in music memorabilia has become increasingly popular in recent years. It offers the chance to own a unique piece of music history, along with making a return on your initial investment.
When investing there are several things to take note of. Items once owned by famous musicians are by far the most sought-after on the market, and due to their unique nature will always be in demand.
Guitars, clothing and hand-written lyrics are the holy grails of music memorabilia collecting, and investors should be prepared to pay large sums for these items. However, if they are supplied with a guarantee of authenticity they should prove to be sound investments.
Mass-produced merchandise rarely holds its value, unless it is associated with the Beatles. However, promotional items produced by record companies and not meant for re-sale are far more limited in number, and are often popular with collectors.
Size of markets
According to reports, in the U.K alone baby-boomers own £3.5trillion of the £6.7trillion of all the wealth amassed in the UK. Worldwide they control over 80% of personal financial assets and more than 50% of discretionary spending power.
This generation has now started to retire, at a rate of 75,000 per week in the U.S and 15,000 in the U.K, and are taking up hobbies and pastimes along with investing in their passions. Having grown up during the 1960s, Baby Boomers are now indulging in ‘nostalgia collecting’, demonstrated by the dominance of the memorabilia market by 60s artists and groups.
As the ‘Baby Boomer’ period lasted from 1946 to 1964, statistics show that the number of retired nostalgia collectors is set to increase over the coming years.
Most valuable investments
The most valuable items are those which are unique, and related to an artist or band regarded as significant in musical history. Within their careers, many artists and groups will also have periods of particular innovation, success, fame or notoriety; items from these periods are highly sought-after by collectors and worthy of investing in.
For instance, there is a large difference between a guitar signed by an artist and a guitar used by an artist; a guitar recently signed by legendary rock musician Pete Townsend from The Who can be worth around £2,000, whereas a guitar played by Townsend during their 1960s heyday can bring upwards of £100,000.
The safest option for investment is memorabilia connected to an already-famous act, particularly those who are no longer performing. Bands and artists with a strong legacy are likely to remain popular for many years after they have stopped recording, and regular re-releases of their work can fuel the public’s interest in them over the long term. The death of a musician will also increase the value of their memorabilia, as it means there is a finite supply of items.
The Beatles memorabilia
The most reliable band to invest in is the Beatles. They remain the most popular band for collectors, with the auction house Christie’s stating that half of their music memorabilia sales are made up of Beatles items.
According to the industry’s PFC40 Autograph Index, between 2000 and 2010 the value of a photo signed by all four members has risen from £5,500 to £22,500 (an increase of 309.1%), and the value of John Lennon’s autograph has grown from £695 to £5,950 (756.1%).
In 2008 the original drum skin pictured on the cover of their seminal album ‘Sgt Pepper’s Lonely Heart Club Band’ was sold by Christie’s for $1.07 million, and a guitar owned by George Harrison and used during the Beatle’s last live gig on the rooftop of Apple records sold in 2003 for $437,750.
Researching the markets
It is important when investing in music memorabilia to research the market first. Things to consider include:
How popular is the artist?
Is there an existing market for their memorabilia?
Are they considered significant in music history?
Do they have a lasting, influential musical legacy?
Investing in famous, established acts from the 1960s has a proven track record. However, the memorabilia of artists from the 1970s and 80s has begun to receive more attention in recent years as the generations that grew up with their music begins to settle down and indulge in some ‘nostalgia collecting’.
Investing in the memorabilia of a relatively contemporary artist can be risky, as there are no guarantees that their popularity will continue. However, if you are happy to take a chance on these items you should carefully consider which artists you feel will have a strong legacy in the future. The memorabilia from modern-day artists is relatively inexpensive compared to that from the 1960s and 70s, but there is no guarantee it will hold its value over a period of time unless the artist has a lasting, celebrated career.
Issues of authenticity
One of the most important factors for investors to consider is that of provenance; without provenance and a guarantee of authentication, music memorabilia is practically worthless as an investment. The market is awash with fake goods, and counterfeit techniques have become increasingly sophisticated.
There are a number of experts and authentications companies that work in tandem with the major dealers and auction houses to guarantee the authenticity of the goods they sell, so if in doubt the best course of action is to always but from recognised, reputable dealers who offer a guarantee.
Where to buy investments
With all items of investment-grade memorabilia, it is important to purchase them from a reputable dealer that can guarantee provenance and authenticity. There a large number of specialist dealers and auctioneers, and all the major auction houses have dedicated memorabilia departments and regular sales.
A large amount of memorabilia is sold through online auction sites, but this can often prove risky. It is impossible to authenticate an item by looking at a photo, and many online sites will not offer a guarantee. If in doubt there are a large number of music memorabilia clubs and societies you can contact for advice. Many will have experience purchasing memorabilia, and will be able to advise you on the best dealers and often answer questions about authenticity as well.