Book Review > Investing in Collectables

This book is valuable for those who are passionate about investing in collectables, and for beginners also who may need guidance.  The focus is how to make a profit out of collecting.  The book is a thorough treatment of the subject.  It is well set out, and will further develop skills for the serious collector.  For those who want a quick overview, the book has “Key points” at the end of each chapter which summarises the main facts and discussion points.

The author claims that if you put the time and effort into identifying desirable collectables – just as you would in identifying “growth shares” on the share market – it is possible to make handsome profits.

If the same time and effort is put into identifying desirable collectables as financial investments it is possible to make handsome profits, and even turn a hobby into a business.  There are good reasons for investing in collectables.  You can begin in a small way.  They do not exhibit the same level of volatility as shares.  An investor does not need to monitor their performance as often.  But they can rise and fall in price if they go out of fashion.

Many readers may disagree with the author that collectables correlate strongly with other investments and in bad economic time hold their value, but no doubt they will agree that if all else fails a collector has invested in items that they can enjoy and that enhance their lifestyle.

Recent research shows that the highest demand is for art, wine, coins and antiques.  The collector will need to develop an understanding of their speciality area.
 
The author gives good advice for buying and selling in international markets.  If buying overseas the collector generally needs to sell overseas to obtain the best price, especially for items collected on a small scale which trade in a more sophisticated basis overseas, for example comic books.  And there are foreign exchange considerations and a need to have a view of what is likely to happen to the Australian dollar.

Conservation, restoration and insurance of collectables are thoroughly examined.  When well done, using collectable to enhance your decor adds personality and style to your home and reflects your creativity and ingenuity at the same time.  Taking care of collectables includes including them against loss or damage.  Most home and contents insurance policies cover items valued from $2000 to $3000.

If you invest in collectables as a business, tax and other legislation need to be considered.  Collectables are eligible investments for self-managed superannuation.  But for most people collecting is a hobby and profit made is not subject to income tax.

The advantages and disadvantages of buying and selling privately and through dealers are comprehensively discussed.

Buying and selling at auction on a small scale has only really taken off in the last 30 years.  Many items change hands for less than $100.  Auctions provide a vital history of values that you can refer to when making decisions about what to buy and sell.  As well they can be exciting, fun but also stressful.  Collectors should attend a few auctions to gain a feel for them and learn more about their collectables. 

Advertisements for them are found in newspapers or via the internet.  However, buying and selling online is potentially a minefield for the unwary.  The author gives good tips on the mechanics of buying and selling on eBay and timing auctions for maximum profit.

The book gives advice on the “do’s and don’ts” when buying and selling collectables.  Negotiating price is an art and should be an enjoyable part of a transaction. Buying from overseas may be cheaper and the only source for some collectables. But here again there are many points to know which protect the collector.

Guidelines for selecting genuine collectables are comprehensive.  Examples of fraud are discussed as there is a prevalence of fakes and forgeries across a broad range of collectables

The author gives common sense advice on how to make money from investing in collectables.  The rules apply to all investments, but are particularly relevant to collectables.

The chapter on useful resources at the end of the book includes contact details for auction houses, books, online bookshops, rare book dealers and dealer associations, stamps, art galleries and fairs, and the media.

Overall the book contains vital advice for those wanting to be successful with their investments.  Therefore I think, being a collector myself, hopefully for profit, “Investing in Collectables” is excellent value for the price.

Patricia Clifton is a member of the AIA.