Buying for investment: when money -- not love -- is the name of the game
Collecting art and antiques has become a national pastime. Princes are high and will continue to rise. Inflation helps push costs upward. But because the supply of top-quality objects is diminishing and the demand for them is increasing, a boom buying period is in full swing. Gray Boone, publisher of Antique Monthly, estimates that the past year's annual market turnover in art and antiques was almost $8 billion, up 25 percent over last year.Skip to next paragraph
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Increasingly over the last 10 years, the word "investment" has loomed over the field. It has become part of the vocabulary of much of the buying and selling that is done and is often a principle motive for purchase.
This means that many people may be buying objects not so much for love as for money. And this fact creates some problems, particularly for the uninformed and unknowledgeable. These problems were an important part of the discussion at Antique Monthly's Sixth Annual World An tiques Market Conference in New York.
Attorney Gilbert Edelson, secretary-treasurer of Art Dealers Association, Inc. in New York, says that 25 years ago when he became involved with investing in art, nobody called it investing.
They spoke, he says, of collecting, and of forming a collection, and they bought with a sense of commitment and of involvement. They generally chose a field of specialization, and then they read, studied, visited museums, worked with dealers, went to exhibitions, and watched the prices in the market. This made for great collections and great collectors.
Now, Mr. Edelson says, people don't talk about forming a collection, but about investing in collectibles and of making them part of an investment portfolio
He describes the difference between a collector and an investor: A collector buys to hold, and to have for the pleasure of the object. Monetary appreciation , while very nice, is secondary to visual appreciation and the joy of ownership.
The investor , he says, buys almost entirely for one reason, monetary gain, and he regards a work of art very much like a stock, bond, or security. He is expected to list his investing intentions with the IRS and perhaps even keep his acquisitions stored away in a warehouse so that no one could misunderstand that money, not love of art, was the purpose of his purchase.
Mr. Edelson deplores the "publicity machine" that is constantly telling the public that art is a wonderful investment. He warns against buying from galleries that advertise that this or that work of art is a 'good investment.'
No one actually knows how much, or if, any work of art will appreciate, he says. "Everyone I know who owns a work of art or an antique is very optimistic about its value, but no one ever really knows its worth until it is put on the block for sale. I think the whole notion of art as an investment has brought about a number of abuses in the art field.
"I believe that many people who buy 'investment' art are easily misled because they don't know as much as they should. Some dealers take advantage of that situation," he continues. "As for the so-called 'art investment business,' I believe it is a trend, a fashion, a fad, and may be on its way out."
Wendell Garrett, editor and publisher of Antiques Magazine, speaking at the same forum, said, "Antiques are a good investment and always have been. But I do think a really alien group has come into the field, a crowd who treats antiques like soybeans and pork, and if they stay around it is going to create chaos. And if they depart, the field is going to get back on a kind of even keel.
"These people who stockpile or warehouse objects of art, and treat them as tangible commodities, encourage fakery and reproductions," she says. "There is an extraordinary amount of fakery going on now. This is one of the most dangerous aspects of this new invasion. It means that many innocent collectors, without knowledge, are being easily taken in."
Mr. Garrett defines a "true" collector as one who does not allow himself to be swept along by the riptides of economic and political change, but who has the long perspective and wisdom that enables him to see "the past as prologue to the future." His healthy skepticism and good sense, this editor points out; enable him to pit his instincts and his know-how against the times and the trends.