There is a funny saying I heard today defining economics. It is the science of explaining tomorrow why the predictions you made yesterday didn’t come true.
Well the art and antiques market isn’t necessarily as volatile as some financial sectors, but like all businesses, encounters constantly changing trends. This makes it very difficult to predict what investments will perform better than others.
It seems to me that for many folk, having art and antiques in your investment portfolio can mean different things to different people. At one end of the spectrum there are professional investors who use the services of art investment funds to acquire important and internationally know works of art either on a shared or single ownership basis. Then at the other end, typically, are the average collectors who may simply have a family heirloom hanging on the wall or displayed on a sideboard. For the latter, fashion and investment trends generally are not as important, but it is nevertheless important to understand that whilst you may have thought your cherished collectable was worth thousands, the reality is that it may only be hundreds. Conversely, and thankfully, the opposite can also be true.
So how do you spot these trends as an amateur collector? Well without stating the obvious, quite literally, market research. I’ll give you an example. Three years ago I would buy regularly in Paris at many of the well know markets. Then, in lets say antique bronze sculpture, the trend was clearly defined and extremely strong in art nouveau, art deco and classical periods.
Compare that with today, and in the same market, you’ll find that great quality and unusual sculptures of those periods, have all but disappeared or are simply unviable at the market prices. For great items, dealers are simply holding on to their stock or putting ridiculous price tags on them. Where an unusual deco bronze by an important listed artist would go for $5-7000, today it would be more like $10-20,000. So what was it replaced by? Well, mostly decorative furniture and items from the 50’s era onwards, pieces which in themselves are unique and individual but more utilitarian in nature.
Does this have any correlation with the wider world? Are people choosing to make more of their existing homes? Perhaps given the rise in DIY company and home improvement stocks we could say yes. Then again, maybe these trends are cyclical. In the UK in the early 50’s and 60’s you couldn’t give away the traditional ‘brown’ furniture that graced most Victorian or Edwardian homes. It was all influenced by the context of the era, clean lines, the space race, futuristic. All terms that we so lovingly refer to today as ‘retro’.
What can we glean from all this discourse then? That depends upon whether you are in the market to buy, sell or speculate. For buyers, it pays to buy the best you can afford, that is in the best condition, and preferably by a well know and listed artist.
For sellers, it’s all about research, research, research. Get at least three appraisals for your item or collectable. If it has risen in value by at least fifty percent, then it’s worth selling. Anything under this, and depending upon how you will dispose of the asset, you could be liable to pay up to forty percent in costs and taxes, especially if you go the auction route and so its probably not worth selling at this point. For the professional or amateur speculator, you need to adopt both buyer and seller guidelines. It will take some time to buy well for profit, but with enough research and a little bit of luck, you should have a few success. Just remember all those additional fees, expenses and costs can really build up when its time to sell.