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Home » Investments
Investing In Antiques
Category :- Investments

Author :- Jaime Corbacho 
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Posted on November 5, 2014, 11:00 pm
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With the proliferation of reality shows focused on the buying, selling and salvaging of antiques, the spotlight is focused on the world of collecting.

While these shows have served to stimulate flea markets, auctions and antique stores with aspiring collectors, there has been an injection of antiques “prospectors” into the community. Though I am very much in favor of the exciting new energy these collectors bring to the world of very old things, investing in antiques, collectibles and art requires the same research and acquired savvy as an investment in the financial world. With this in mind, ThirtySomethingInvestor has kindly asked me to provide some simple tips for those looking to invest in art and antiques.

 

Is Investing in Antiques Right for You?

In order to successfully invest in antiques and art, you must have an interest in them. Even if this is a very basic admiration that can be cultured into a connoisseurship, the tinder must be there. I find that people who claim not to understand art or are intimidated by antiques often lack exposure. Developing a taste and love for decorative art and furniture begins by deciding what you like. I meet people who cringe at “antiques” because the word immediately evokes the heavily carved mahogany and precious trinkets of the Victorian era. Yet, when I introduce the same people to Danish mid-century furniture or primitive pottery, they swoon. Art has existed for over 30,000 years. From the drawings of Chauvet Cave to a digital photographic print, the world has centuries of diverse art styles and mediums to offer those yet to find their passion. Likewise, history provides a variety of objects to collect. If you’re a kid at heart, collect toys. If you love to a good nap, collect chairs (though I must admit, most of the world’s valuable chairs are uncomfortable). The important thing is to enjoy what you decide to collect because investing in antiques is not easy. You must do ample research before big purchases and invest hours in the hunt. If you are excited about expanding your collection, these hours will be painless. But if you decide you just don’t have an interest, then I would recommend investing in another area. There is no shame in being indifferent to antiques, they are not for everyone. I am often accused of being “cash poor, furniture rich,” but I invest in what interests me. I think this is the touchstone of all successful investments.

 

Where to Start?

My first suggestion to would-be collectors is to start visiting local museums, antique malls, antique stores and auctions at regular intervals. Avoid flea markets, garage and estate sales. The reasoning behind this is you must first get an idea of what the high end of the market is before you go looking for it in the wild. You need to get a sense of how to separate the wheat from the chaff or you will be easily overwhelmed in a flea market or estate sale environment. Though they are often the best places to discover hidden treasures, you first must establish what you’re looking for.

I also recommend watching as many antiques-based television programs as your DVR will allow. Shows like Antiques Roadshow, American Pickers, Pawn Stars, Storage Wars and America’s Lost Treasures are just a smattering of programming that serves to entertain and educate people on antiques. Most people watch for the characters (who doesn’t love Barry?) and are inadvertently exposed to sound collecting advice. The web also provides a wealth of knowledge for the beginning collector. From numismatics to Wagner and Griswold cast iron and aluminum cookware collectors, there is a society for everything—each with a website rich in tips. Other websites I visit regularly are liveauctioneers.com, artprice.com, rubylane.com, worthpoint.com and ebay.com. Most of these sites have free registration but some require paid subscriptions. In the case of artprice.com, I would highly recommend buying a subscription if you plan to invest in art. Their $200 annual fee could end up saving you thousands of dollars over time, as I find people generally overpay for fine art.

 

My other recommendation is to find a local antiques store whose wares and aesthetic you like and become a regular. I’m not saying drop in every day, but visit once a month or every other month, giving the shop time to turn over its merchandise. Choose a shop where the owner is typically onsite and helping customers. Introduce yourself and express interest in what he or she is selling and ask questions. Buy something from time to time to let them know you are a legitimate customer. Don’t haggle with the price initially, even if this means buying something small to stay in your budget. Owners hate people who are constantly questioning their prices. As time goes on, you may be able to ask for a bit of a discount and successfully get one, but stay to the sticker in the beginning. People who buy and sell antiques love to talk about them and ingratiating yourself with someone who has years in the business offers you access to a wealth of information as well as a new friend. Your shopkeeper can offer insight on trends you can’t get from websites and may be able to broker your purchase of a hard-to-find piece.

 

Into the Wild

Now that you are more comfortable with the art and antique world and have decided what you’d like to collect, it is time to let you loose into the wild. It is also time for a hard truth. Most of the television programs create an improbable situation where a basement find yields a multi-digit paycheck. Does this happen? Rarely. Money breeds money and the collections of wealthy families reflect that. If you come from generations of one-percenters, chances are you have inherited some valuable items. If you come from a lower tax bracket, chances are what you have inherited is just old. I don’t mean to sound disrespectful and I hate saying this, but not everything old is worth money. Antiques appraisal can be a particularly difficult business because objects often serve as vessels of sentimentality, and it is hard to break the news that memories don’t translate into income. I think this a good thing; I don’t want to put a price on my grandmother’s “Made in Japan” porcelain elf sculptures from the 40’s. They will likely never be worth more than $5 except to me. To me, they are priceless.

This is not always the case. Sometimes a prudent relative will splurge or purchase something that becomes highly collectible. I’ve also seen wealthy houses full of inexpensive objects that will never accrue value. But this is the exception, not the rule.

So what if Aunt Agatha’s postcard collection isn’t worth a plug nickel? The good news is you can invest in antiques on a modest budget. At the same time, I must dust off the adage: you must spend money to make money. I absolutely know people who, through years of picking (i.e. buying on the cheap) and researching antiques, can make over 1000% profit by buying an item for peanuts and turning it around in the appropriate market. Yet everyone I know who can do this does this for a living. As in, this is their job 24-7. Also, they have a raw gift for it, it’s in their blood. The best picker I have the honor of knowing is Jess Sturtevant of Braden River Antiques in Florida. It runs in his family three generations back, and he has been doing it every day since he was 4 years-old.

I am not trying to dishearten you, I’m just trying to make you an informed buyer. So when someone tries to sell you an original Renoir for $100, you won’t be out a $100. An investment is just that; if I went to a broker with a check for $15, I would expect to be laughed out of his office. But if I went in with a check for $1,500 or $15,000, chances are I might be able to find someone who would work with me to invest that money in something that would yield a dividend over time. The same rules apply to the antiques world. If a client came to me with plans to invest $300 in 100 plastic toys he found at a flea market for $3 apiece, I would caution against this purchase for 3 reasons: 1. If the price seems too good to be true, it probably is. 2. Selling off 100 of anything is a challenge. 3. Storing 100 of anything will take up space and may result in storage costs until the market is right to sell them. Now, if the same person said he went to the flea market and was able to talk a merchant into accepting $300 for a 1950’s Eames DCW (Dining Chair Wood) chair priced at $475, I would advise him to purchase it. If he decided to sell, mid-century Eames chairs hold their value and he is getting it for a good price. Also, it’s a comfortable chair and a versatile piece that fits nicely into a modern home and doesn’t take up much space. If he decided to sit on it (both literally and figuratively), it would make a nice addition to a living space. In essence, it would be a good investment.

The important thing is to enjoy the hunt and don’t be afraid to make mistakes in the beginning. A wise person once told me that in the antiques world, you pay for your education one way or another. Don’t let a few bad purchases or dishonest sellers discourage you.

 

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What’s Hot, What’s Not

As you might have gleaned, investing in antiques is not all that different from investing in commodities, real estate or other areas. Collectibles and art have fluctuating markets, like anything else. When choosing your poison, a little bit of research can go a long way. For example, say your mother collected vintage Fiestaware, brightly colored ceramic dinnerware made by the Homer Laughlin China Company from 1936-1973. You always admired your mother’s collection, have already started a collection of your own with pieces she’s given you over the years and remember her selling some for hundreds of dollars in the 80’s and 90’s. You go onto eBay and do a search for Fiestaware. Instantly, over 5,000 active listings pop up. This is always a red flag. You want to be collecting things in high demand with low availability. Looking at the active listings, you are encouraged. There are some pieces being sold for $1,000-$5,000. However, these are active listings, meaning they have not sold for those prices yet. Lucky for you, eBay now has an option where you can customize your search to “sold listings.” Clicking on this option will give you a much better idea of the market. Here, you can see a few rare pieces of Fiestaware selling for just over $1,000, but the majority is selling within the $50-$150 range. In 5-10 minutes, you have done “market research”…not too difficult, huh? Though there is still a market for Fiestaware, it is not what it once was due in large part to eBay, and you might consider investing in something else.

Like other investment markets there are things on their way out, things on their way in and perennially valuable items. You will pay more for this last category, but there is also a greater chance of these items holding their value. Here are some examples:

 

Losing Value: Books, antique appliances, rugs, Old Master prints, furs and clothes. Obviously if you have a Gutenberg bible or a dress worn by Marilyn Monroe, there will be an exception, but generally, these items have a dwindling marketplace.

 

Gaining Value: Mid-century modern, art deco and industrial furniture and objects, early 20th century posters and advertisements, obsolete medical tools and curiosities, repurposed antiques (think Etsy), Post Modern and Abstract Expressionism artwork and early Native American items. There will be things in all of these categories that are less valuable than others, but modern décor has caused a demand for these items.

 

Always Valuable: Fine jewelry, sterling silver items, well maintained pre-19th century furniture and items with important and traceable provenance. “Important and traceable provenance” is a fancy way of saying a documented history of the item being owned by a famous individual. No one is going to want your multiple-great Aunt Catherine’s kerchief but they will if you can prove she was Catherine the Great.

Lastly I would like to leave you with a quick list of things to consider when investing in antiques. It has the added benefit of being an acrostic of my name so you will be forced to think of me every time you make a purchase (wink!):

 

 -JUDGE whether collecting art and antiques is right for you.

 

 -ACQUIRE knowledge and market information on your planned investments.

 

 -INVEST only after you have researched your investment and only in objects that are within your budget, that you have space for and will enjoy until it is time to sell them.

 

 -MAINTAIN the condition of your investments by storing and displaying them in environments that will not damage them. Seek restoration only when it will increase their value and only by trusted and trained professionals.

 

 -EVALUATE the market before selling and try to engage in single party sales whenever possible.

 

Feel free to contact me trough my website www.corbachoappraisals.com or at lacorbacho{at}gmail.com with any further questions. Thank you for your interest and invest wisely, ThirtySomethingInvestors!

 

Source: http://www.thirtysomethinginvestor.com/investing-in-antiques-a-basic-guide/


Comments : Jaime Corbacho, ISA AM, is a personal property appraiser and consultant in Los Angeles, California. Her practice includes providing comprehensive USPAP and ISA compliant appraisals for the purposes of estate tax and settlement, insurance coverage, general knowledge, equitable distribution, and the charitable donation of estates, typically in excess of 500 items and $1 million.
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