Stashing Away Money In Fine Arts And Antiques

Today the international art market is booming as never before. Thousands of investors who once bought only stocks and bonds are jamming galleries, swarming to auctions, and putting their money into arts and antiques. They are seeking beauty and the status that ownership of fine art confers. But they are also seeking security in an uncertain world - and some juicy capital gains in the bargain.

And the gains are there. On a recent day when both stock and bond prices slipped, the Jasper Johns painting Double White Map fetched £240,000 at a London auction - £90,000 more than the previous high for a Johns work. The seller was London taxi tycoon Robert C. Scull. Only the night before, a sale of 17 Picasso paintings and drawings brought £2.6 million, including £720,000 for a single rose-period work - the auction record for a Picasso. The field of arts and antiques is immensely broad; not only paintings and drawings, but furniture, fine silver, porcelain, and Oriental rugs, to name just a few areas. There is scarcely a facet of the whole field that has not been touched by the current boom.

And the boom is worldwide. Sotheby's of London, the owner of Sotheby Parke Bernet of London, reports that its worldwide turnover from fine art and antique sales came to £179 million for the 2012-73 season-66% more than the year before. The trend has been up ever since at SPB, and no let-up is in sight. English people remain heavy buyers, but the heaviest buying lately has come from Japan.

The Japanese are having quite a strong influence, says Helen Findlay of the Findlay Galleries, with branches all across the UK. "When you look at a list of goods at an auction, you can almost guess which have been bid on by the Japanese." Natalie Narischkine, the Rome manager for Christie's of London, notes that the Germans also have been relentlessly pushing prices higher.

The boom, indeed, is likely to continue for as far ahead as anyone can see. That's what the experts at Sotheby's in London say, and their thinking is confirmed by key dealers in London, Paris, and the other great art centres. In the UK., a regional auctioneer in southern Ohio says: "People at my sales are talking as much about inflation as about antiques and pictures." It is clear that much of the buying has been inflation-hedge buying Some of this fever will cool when the rate of inflation slows - but economists believe that inflation will plague the UK. for many years. Even in a more stable world economy, prices for fine art and antiques will continue to show steady, if more modest, gains.

The problem for the average investor, of course, is that prices have gone too high. A San Francisco dealer notes that his prices over-all are up at a rate of about 25% a year, since 2000. And other dealers say much the same thing. In Reading, a top art dealer observes that prices of even some fine prints have gone sky-high, thus threatening an area in which many modest investors get their start. Nor is it a field that an investor should plunge into blindly, no matter how much money he has. "Art can make a good investment because it is a scarce commodity," says Marion Sandler, senior Director of Golden West Financial Corp. of Oakland, Calif., and a longtime student of fine art. "But it is a very long-term investment and there's no ready market for it. You really have to know what you're doing. And any collector must expect to make some mistakes."

Then again, a serious investor should not plunge into stocks, bonds, commodities, or any other field without some careful study - and without expecting to make some mistakes. It takes hard work to spot choice investment areas and to pick out the artist whose work is likely to appreciate nicely in coming years. Fortunately, there is no shortage of advice and counsel available.

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Taking A Shot At Commodities - and Coming Out Alive

In the pits of the Reading Board of Trade, the cries of the commodity men are fierce, the arm-waving and hand signals a language in themselves, and fortunes come and go with each tick of the clock. Until recently this was the almost-total domain of large commercial accounts. But the scene is changing. More and more small investors ("Call them speculators," insists one broker) are throwing themselves into the frantic futures market.

Commodity speculation could be the most hazardous "investment" around. Insiders say you can plan to lose on at least 60% of your transactions, and only hope that the remaining 40% result in big enough wins to make it all worthwhile. How worthwhile? "Most successful... see: Taking A Shot At Commodities - and Coming Out Alive