July 2012 newsletter
In recent months there has been much talk of investment in wine - and how those who thought they were buying first growth Bordeaux were being duped (scammed, or whatever the modern word is for being taken in by skulduggery). Nevertheless, bought from a reputable wine merchant, wine can indeed, be a sound investment - if you don’t drink it! And that is the point; an investment is something bought at one price with the intention of selling it later at a higher figure, and preferably one that outpaces inflation. Some would say it is only an investment if it is sold and that while it remains unsold, it is simply an asset. Do people, other than dealers, buy antiques with a view to selling them at a profit later? You, my readers, are probably better able than me to answer that.
With record low interest rates, and for such a prolonged time, many are looking for alternative areas into which to put their monies. Building societies pay pitiful returns, while banks pay outrageously low interest rates. The stock market seems to spend as much time going down as up and the precious metal market seem to have lost its shine (sorry about that). Property is not for everyone, and has been more than a little unstable in recent years, quite apart from the sums involved being more than most can afford. So where do people put money if not in the traditional havens of safety?
I have always abided by my father’s dictum that antiques should never be promoted as an investment, but in the current economic climate does such a long-held tenet still hold? To a large extent it probably does, but there are areas of that very broad spectrum we call antiques which may make an excellent ‘investment’, particularly in the medium to long term. The key is avoiding areas where there is a small number of collectors, because if a few of that small number begin to loose interest in their hobby, or worse still leave it, then that market can tumble with devastating effect. This seems to have happened recently with claret jugs of the glass-and-silver variety, where prices have diminished by more than 60%. There were never many collectors of claret jugs, but two of the big players curtailed their buying - hence the dramatic price downgrade. Prices have now reached a realistic level, but there are still jugs on the market, bought and offered at the old high prices so where to buy for investment is crucial. Claret jugs are far from being the only antique commodities to have suffered in this way; there are many others.
The other side of the coin, and it is crucial that I say so, is that there are many other categories of antiques which represent excellent investment potential and some reside in my niche market; I am particularly thinking of decanters. These really are superb value-for-money. Georgian wine glasses have been collected by a great many enthusiasts for 150 years, so with such an established collector base, that market is unlikely to falter. Coasters, like the decanters they were intended to hold, have never had a strong collector following, neither have wine coolers or bin labels. This means there is a substantial portion of my speciality which falls into investment portfolio potential.
The key to buying antiques for investment, like any other investment, is to have expert advice, unless you are an expert yourself in your chosen subject. Buying antiques at auction is not to be recommended unless, as a buyer, you know your market very well indeed. Furthermore, the difference between what is paid at auction for an antique and what the seller receives, can be anything between 30% and 65% which is a substantially wider ‘spread’ than applies to almost any other form of investment where single figure spreads are the norm.
In selecting my ‘Pick of the Month’ on the opening page of my website, I always try to select something which is both a little extra special and which I think is excellent value. Currently there is a decanting machine/cradle in exceptional condition. Do also have a look to see what I will put in that slot in a week’s time.
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I said last month that I would report on the June antiques events in London. I was unable to go to Art Antiques London, so am unable to report first hand. However I am told it was good. Olympia has succeeded in taking itself upmarket, and exhibitors seems reasonably happy under the current economic situation.
Masterpiece was special and in its third year it continues to grow, impress and deliver an extremely high quality show. While there are stands of the finest antique furniture and silver, it is equally a showplace for high-end luxuries. Classic cars and boats rub shoulders with modern art and jewellery. The aisles are wide and spacious, the decor ultra-chic, and it is served by elegant eateries and wine bars, and all the other services that make for a relaxed and extravagant perusal of what is on offer. It has also developed a thoroughly international side with exhibitors from France, Germany, Italy and the USA, among many others, displaying a rich diversity of taste. It is worth putting in your diary for next year (June 26th - July 3rd). Perhaps I will see you there; I hope so.