The article the published in the Journal is entitled For Love or Money: Antiques as Investments. To order the journal or for more information including authors and titles, how to submit articles for publication, order past issues visit the website at www.appraisaljournal.org. Proceeds support the educational initiatives of the Foundation for Appraisal Education. Please support this worthy cause and project by ordering a copy of the journal for your library.
To order your copy of the Journal of Advanced Appraisal Studies - 2010 click HERE.So where did the idea of investing in antiques come from? Certainly the Information Age has played a key role, with 24-7 access to information about every hop, skip, and jump that the market makes, and anyone can create a website, blog or even self-publish a book. The Antiques Roadshow has inspired thousands of treasure hunters to begin their search in their own attics and basements, not thinking of turning up some family heirloom that will offer insight into their own history, but rather in hopes of finding something they can sell. (The televised commoditization of antiques is also alive and well in England, where they have had Antiques Roadshow for 30 years, and more recently, a similar show titled, more blatantly, Cash in the Attic.) Then there is eBay, where thousands of antiques can be bought and sold every day, and with little effort and, sometimes, little knowledge. With so much information and so many opportunities out there, it is no wonder antiques have become less historical and more fiscal.
But what about truly investing in antiques? The vast majority of those who buy and sell antiques, including dealers, are not really investing; they are speculating. We no longer seem to differentiate between “investing” and “speculating,” which may explain a great deal about the current state of the global financial system, but pinning down clear and comparative definitions of the two terms can be difficult without looking back a few years. Graham and Dodd’s Security Analysis, a textbook classic from 1934, states it fairly succinctly, reading, "An investment operation is one which, upon thorough analysis promises safety of principal and an adequate return. Operations not meeting these requirements are speculative." (Graham and Dodd also mention that a failure to differentiate between investing and speculating played a large role in the “market excesses of 1928-1929 and the calamities that ensued.” ) Investing suggests a longer-term commitment with limited risk; investing is not buying a painted blanket chest on Friday and “flipping” it on Sunday for a quick $400 profit. In fact, in what world would an antique blanket chest really offer “safety of principal”? By conflating the words “investing” and “speculating” we may be misleading ourselves about the security of our financial decisions. When one considers how much buying, selling, and swapping occurs during the set-up of a typical antique show, which may really be best compared to day trading, it makes a person wonder if anyone really invests in antiques at all. Is not what we see happening speculation by definition rather than investment?
Furthermore, antiques are trendy - prices paid are often reflections of an irrational collector who is concerned more about the status of ownership than a positive exit strategy - another aspect that pushes them more toward high-risk speculation, as opposed to creating steady and predictable returns like investing in plastics or communications technologies. For instance, thirty years ago "country primitives" were popular, as were hand-painted china, Victorian marble-top dressers and hearth implements, but today, Andrew often feels he has spent his entire day disappointing people with these objects who keep exclaiming, "But when I bought it twenty years ago..." Today's market is all about folk art, weathervanes, and anything "in original surface,” and, based on the history of the marketplace, in thirty years, many of these people may be disappointed as well. Trends do not make good investments since it is nearly impossible to predict when a particular type of antique has peaked and thus “buy” turns to “sell.” Beyond this, who knows what will be popular and what will be passé in ten, 20, or 30 years? Perhaps Victorian furniture will experience a resurgence in popularity, and maybe worn, painted furniture will just be considered shabby and not shabby chic.
No comments:
Post a Comment