"The art world is no longer a safe haven - Investors in stamps, jewels and wines may not escape the global economic downturn: Plunging stock markets have pushed many investors into alternative assets such as collectable items they hope will hold their value, but are they really recession-busters? The Royal Institution of Chartered Surveyors recent Art and Antiques Survey showed a decline in low to mid-range art and antiques in the third quarter of this year, although the super-rich continue to pay for high-end contemporary and rare pieces. The problem for investors seeking safety in collectables is that, unless they have some degree of expertise, they may be vulnerable to fads, fakes and fraudsters. For instance, Mike Hall, chief executive of stamp dealer Stanley Gibbons, said that during the boom years of 1975-80 'A lot of lower quality stamps were mis-sold by unscrupulous dealers and their value subsequently collapsed'. Remember that, unlike investments, there is no Financial Services Authority through which to seek redress. Those who take time to look into their markets can do well, though, on everything from books, wine and stamps to jewellery and photography. ART: Rics spokesman Andrew Davies of AXA art insurance says: 'There is an urban myth that fine art and antiques are recession-proof. This is wrong. This market lags behind the economic cycle by around a year to 18 months. So people should not rely on it. The bottom end of the market is dead. I went to an contemporary art auction last week where there were 283 lots and only 82 lots sold. That is appalling. Those that did not sell were in the 1,000 to 5,000 range.' Jason Butler, a partner at advisers Bloomsbury Wealth Management, is also sceptical, pointing to the knowledge you must attain or pay for to participate in the art market. He said: 'These assets are illiquid and there is no mechanism for providing a return, unlike the yield with bonds and dividends from equities. You may buy at the wrong time and have to wait years to make a gain. [There are some companies, for example in Australia, that rent out portfolios of art to the corporate sector that their clients have purchased giving their clients a guaranteed rental return for the first two years in the region of 7%.] BOOKS: 'Many are looking for the next JK Rowling with potential for growth in value in the future,' said Robert Harkins of bookseller Anderida Books (anderidabooks.co.uk). An authors signature can make all the difference. Harkins said: 'JK Rowling signed only 1,700 copies of The Deathly Hallows. First editions of that are worth only the cover price but with a signature they go for upwards of 1,000. For most other authors it does not attract a great deal of value.' WINE: Fine wines have the advantage of enabling investors to drown their sorrows should prices prove disappointing. Joss Fowler at wine merchant Berry Bros
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[ Money / Invest ] - ID: 30129
"The art world is no longer a safe haven - Investors in stamps, jewels and wines may not escape the global economic downturn: Plunging stock markets have pushed many investors into alternative assets such as collectable items they hope will hold their value, but are they really recession-busters? The Royal Institution of Chartered Surveyors recent Art and Antiques Survey showed a decline in low to mid-range art and antiques in the third quarter of this year, although the super-rich continue to pay for high-end contemporary and rare pieces. The problem for investors seeking safety in collectables is that, unless they have some degree of expertise, they may be vulnerable to fads, fakes and fraudsters. For instance, Mike Hall, chief executive of stamp dealer Stanley Gibbons, said that during the boom years of 1975-80 'A lot of lower quality stamps were mis-sold by unscrupulous dealers and their value subsequently collapsed'. Remember that, unlike investments, there is no Financial Services Authority through which to seek redress. Those who take time to look into their markets can do well, though, on everything from books, wine and stamps to jewellery and photography. ART: Rics spokesman Andrew Davies of AXA art insurance says: 'There is an urban myth that fine art and antiques are recession-proof. This is wrong. This market lags behind the economic cycle by around a year to 18 months. So people should not rely on it. The bottom end of the market is dead. I went to an contemporary art auction last week where there were 283 lots and only 82 lots sold. That is appalling. Those that did not sell were in the 1,000 to 5,000 range.' Jason Butler, a partner at advisers Bloomsbury Wealth Management, is also sceptical, pointing to the knowledge you must attain or pay for to participate in the art market. He said: 'These assets are illiquid and there is no mechanism for providing a return, unlike the yield with bonds and dividends from equities. You may buy at the wrong time and have to wait years to make a gain. [There are some companies, for example in Australia, that rent out portfolios of art to the corporate sector that their clients have purchased giving their clients a guaranteed rental return for the first two years in the region of 7" TARGET="_top">Send as Free eCard