Many of us believe the myth that in order to successfully invest in antiques you must be an expert, preferably with decades of experience and a PhD or two under the belt. And while I think it is clear that more knowledge is better than less knowledge, it isn’t a requirement to be a good antique investor. With only a little basic knowledge, beginners can do just fine investing in art and antiques.
Why is this the case? After all, if you don’t want to be eaten alive in the stock and bond markets, you’d better have extensive, specialized technical knowledge. Even then, as the famous 20th century British economist John Maynard Keynes once said, “The market can stay irrational longer than you can stay solvent.” No wonder so many people just throw their savings into a vanilla S&P 500 index fund and forget about it!
But investment quality art and antiques is a different animal. First, it is very much an alternative asset class. This means there are relatively few investors looking for opportunities there at any given point in time. So there is a lot less competition than in the traditional paper asset markets. As a consequence, the good buys are often sitting in plain sight, just waiting for someone, anyone, to come along and scoop them up.
A great example of this could be found in high end, vintage fountain pens. After the development of cheap and effective ballpoint pens in the 1960s, antiquated fountain pens quickly fell out of favor. So they languished, unused, in old desks, the back of dresser drawers and buried in closets.
By the 1990s and early 2000s, you could find vintage fountain pens at garage sales and flea markets for maybe $5 or $10 each. Today, circa 2017, a common example of a problem-free vintage fountain pen might trade for anywhere from $50 to $100. Absolutely anyone with even the most basic knowledge could have bought these overlooked investment gems by the dozen for a pittance only a decade or two earlier.
“Back to basics” is another theme to strongly consider when you invest in antiques. You don’t have to conduct fancy analysis or complex market studies to find a solid investment grade antique. Instead, you just have to follow five simple rules. If your antique is portable, high quality, durable, scarce and exhibits the zeitgeist of its era, then congratulations, you have a winner!
But wouldn’t being an expert help you choose even better antiques? The answer to this question is “yes”, but only a qualified yes. Expertise has its limitations, even in the realm of art investments.
Numerous psychology studies have shown that having more facts about a topic makes a person more confident in his conclusions about that topic. However, once a basic level of understanding has been achieved, any additional knowledge does not increase the accuracy of those conclusions, statistically speaking. In other words, more knowledge, while generally good, can also lead to overconfidence, which is a deadly sin in the world of investing.
In the end, it is most important is to invest in antiques that personally appeal to you. It could be vintage mechanical wristwatches, or ancient Greek coins, or mid 20th century Japanese “Shin Hanga” woodcut prints. Almost any antique will do, provided it meets the five criteria of investment grade antiques mentioned above.
Then, search online auction sites and antique dealers, like eBay, Etsy or Ruby Lane for items in that category that look good to you. Chances are that if you find an item aesthetically attractive, other people will as well. This, ultimately, is the basis of investment demand and, by extension, good returns in art.
Of course, you absolutely need to learn the basics before you invest in antiques. Purchase a book or two on the topic first. Or, better yet, get up to speed on a collecting topic in about 15 minutes via the Guides section of the Antique Sage website. If you are really interested, you will gradually develop expert level knowledge over time. And while that is good, you don’t need it in order to successfully invest in art and antiques.
