The art of investment

Apr 29 2008 by Gloria McShane, Evening Gazette

WITH turmoil in financial markets, should savvy investors develop a sudden taste for art and antiques or even gold? GLORIA McSHANE reports

WHENEVER economies suffer a severe attack of the jitters people traditionally look beyond the stock market for more tangible targets for investment - but experts warn a wall full of Warhol is not an instant cure for the financial blues.

Research last week by the Royal Institution of Chartered Surveyors (RICS) found the market for alternative investments, such as art and antiques, remains buoyant.

A total of 20% more surveyors reported a rise than a fall in lot prices in the first quarter of this year.

At the more expensive end of the market, 50% more surveyors reported a rise than a fall in the price of lots worth more than £5,000.

But the RICS art and antiques survey also said that in the lower price brackets - lots from £1,000 to £5,000 and £1 to £1,000 - sales were subdued.

Only 7% and 4% more surveyors respectively reported a rise in the first quarter of 2008.

Nevertheless, you can still make a killing. Top auction house Bonhams has sold paintings by Indian artist Francis Newton Souza for between $296,000 and $1.4mUS (£149,000 and £706,000) recently, making it a nice little earner for those who invested just a few hundred pounds in his work some six years ago.

Sales are healthy at all price levels, a Bonhams spokesman said, but he cautioned: “Buy with your heart, because art and antiques rise and fall in price just like other assets.”

According to fine art expert Rosamund Jordan, who runs TB & R Jordan dealers with husband Tom in Eaglescliffe, the modest upward trend may continue, as small investors follow their wealthier counterparts.

The couple has seen dozens of enquiries from the public in advance of their next major exhibition at Harrogate this weekend.

The Jordans specialise in local art, including the Staithes Group of British Impressionist artists who painted in the area around a century ago.

“In the present climate of uncertain markets and comparatively low interest rates, there has never been a better time to invest in pictures,” Rosamund says.

She advises buying work you love: “The main reason for art investment is to invest in your pleasure and happiness, so you can enjoy the art regardless of how the market is doing.”

After gold hit a record-breaking high of £1,000 per ounce last month, many may have been tempted by the bling - especially as gold fever continues to grip Asia and India.

Andrew Priestley, a stockbroker for Middlesbrough-based Redmayne Bentley, said: “In times of anxiety, gold is a safe haven and has been for thousands of years.”

However, there is no guarantee gold prices will continue to soar from a low of below £300/oz in 2000.

“It’s now at an all-time high, so buyers would have to make their own judgement on whether to get into it now,” said Priestley.

On alternative investments such as art, he added: “I can understand people looking to another asset class that may go against the general flow, but a falling tide can lower all boats.”