Investing in Antiques - High Interest Potential
With interest rates currently being so low, many savvy investors are looking for better places to invest their money for the long term.
One such place that isn’t always thought of amongst the usual suspects of ISAs (Individual Savings Accounts), playing the stock markets and even pensions, is investing in antiques.
Like with most savings and investment opportunities, if you’re willing to play the long game in antique collecting, you can reap the rewards. You don’t even have to have a huge collection to be able to make substantial returns, in fact, as Gorringe’s senior partner, Philip Taylor, states - it can often be beneficial to invest in just one high quality item rather than several average items when attempting to hedge your bets:
“I’d advise against collecting a number of average pieces of the same type, but instead pool the sums they would have cost into purchasing a single outstanding piece, because these pieces will grow more rapidly in value, take up less space and, undoubtedly gives the greatest pleasure to the collector.”
How to spot an antique worth buying and keep tabs on trends
Obviously, just like stock and shares, the values of antiques and collectibles can rise and fall. However, unlike the former, objects can be a source of real satisfaction and enjoyment, both to the eye and as a physical, tactile experience. That’s why we often recommend considering purchasing antiques when decorating your home, as you’re essentially investing for the future that way, as opposed to buying mass produced items that will only depreciate in value.
As Philip Taylor goes on to say - keep track of trends and enlist help wherever you can in doing so:
“If buying through an auction house, try to build a rapport with the specialist in the field that interests you. Many auction house department specialists are only too happy to share their knowledge, point out pieces to avoid and give tips on what to look out for. They are also very aware of current trends and can give an early indication of how the market is moving.”
Comparing investment options
The following does not constitute advice and it’s important to be aware that there is always a chance of losing money with any investment. The data below however is interesting, because it looks at the S&P 500 index (a benchmark of American stock market performance) and shows that since its inception, average returns have been 10%.
While a return of 10% is not to be sniffed at, antiques (like some stocks) can often return far more than that - especially over the long term and - perhaps unlike stocks - it is rarer to see an antique investment (if bought at the right price of course), give a negative return to the extent that a stock trade can.
There are some dream stories too of course regarding antiques purchased at car boot sales for loose change, only to sell at a later date at auction for six and seven figure prices!
In 2002, music fan Warren Hill found an odd-looking acetate disc at a Manhattan flea market with 'The Velvet Underground' written on the label, and bought it for £0.60p. The disc turned out to be a super-rare demo by the Velvet Underground and was sold on eBay in 2006 for £19,900!
Image source: Ebay via lovemoney.com
Another great example was In 1970, a woman bought a plate in Rhode Island for less than $100 and it sat above her stove for years. In 2014 she took it along to be appraised on The Antiques Roadshow and was shocked to discover it was a Picasso-designed Madoura plate from 1955 worth in the region of £7,970.
Image source: PBS via lovemoney.com
There are endless examples of this sort of return - and while these stories may be rarer than most, there’s still great returns to be made by choosing the right item. As Philip goes on to explain, what you buy should be driven by what you find aesthetically pleasing in addition to making sure the item (or items) has a bit of history and is of clear quality.
“I’m frequently asked what’s the best thing to invest in and after 50 years in the auction industry, the best advice I can offer is to invest in something of real quality that also gives you the greatest aesthetic pleasure.
“Whether it be a great picture, a piece of silver, jewellery or a piece of furniture, try to acquire a piece that’s the best you can afford at the time of purchase.
How to buy antiques during lockdown
Like most industries, the antiques trade is very much available to buyers and sellers online.
Through internet bidding platforms, such as the one Gorringe’s offers its customers, buyers can be alerted to auctions being held that contain items of specific interest. Once you have listed the items you’re seeking, you’ll receive details of the auction house, sale date, lot number, item description, the estimate and a photograph. If you’re really interested in the item, you can request a detailed condition report and, if necessary, additional photographs.
Twenty five years ago collectors would have had to travel great distances to view, buy and then collect pieces. Today thousands of miles can be covered from the comfort of your home. A warning here! It can become extremely addictive!!
Gorringe’s online auctions
We run online auctions throughout the year. Our next is on Monday 20th April, so be sure to register or sign in online and take part. You never know, you might just find that next bargain to turn into a fortune!
Thanks for reading.