For thos of us who have been burned in the stock market, it has been suggested that there are other ways to conserve wealth. Supposedly, rare art returns >20% per year, and chinese porcelain is almost as good.
But how do you do it? It seems to me to be difficuclt: firts, you have to know what is good (there is a lot of trash to be wary of). Second, you must buy and sell through auction housesor dealers…both of which charge heavy commisiions.
I recall reading about the late Edward G. Robinson (the movie actorof the 1930’s-40’s). In addition to being a respected actor, Robinson was an art collector. Yet, when he died, his extensive collection was broken up and sold. It yielded a pretty paltry return…something like 2% per year, which is less than the yield obtained from bonds.
So, how does a smal linvestor make money via investment in collectables? Do you have to spend your life becoming an expert? 
The problem with investing in art is that it is not fungible and its value depends in large part on trends in the market place that are much less knowable than the already opaque market analysis metrics common to investing in stocks and bonds.
As an example, you may buy a nice porcelain piece that steadily grows in value over the years, perhaps even at the 20% that you stated. In order to realize that increase in value, you have to sell it. Buy low, sell high. But art works have this unfortunate tendency to become heirlooms, making them hard to part with. And if you want to maximize your investment, you’ll have to sell when the market dictates and not when you need the money. So when retirement comes and you want to cash in to buy that retirement nest, you may be faced with the real possibility that because IKEA has popularized Viking inspired items (or whatever) the market in porcelain is now in a slump. Or even if it isn’t, you’ll have to look hard to find that collector that needs your piece for his/her collection and is willing to pay Antiques Roadshow dollars. Do such people exist in your area? Finally, you’ll have to pay taxes and possibly gallery/auction fees.
In summation, it is better to buy art because you like it, rather than as an investment. But if you still want to, I have some highly collectible Nagel prints lurking in my storage locker that I could let go cheap . . .
cj
[Moderator Hat ON]
I think this will do better in General Questions.
[Moderator Hat OFF]
supposedly less than 1% of all art ever produced(that is, art produced by actual artists) increases in value. If you can pick the next trend then you cash in big. Otherwise, the return is pretty dismal.
Let me preface my response by saying that I’m by no means an expert, but I do collect art.
For a small level investor, art is a really crappy way to try and make $$. Assuming you can’t afford hundreds of thousands of dollars, your ROI is going to be pretty well up in the air. You could get lucky and find the next hot trend, or you could get something from an artist with “good prospects” that winds up doing diddly. Really, you should buy art because you really, really like it.
If you do have hundreds (high tens, maybe) of thousands of $$ to invest, someone other than me will have to advise you. 
There are mutual funds that specialize in investing in art. Here is an article that describes some of them.
Also, there is a company called Mutual Art that’s trying to establish a sort of pension plan for artists. The idea is to identify 250 up-and-coming artists and have each contribute twenty artworks over twenty years to a pool. After some time, the art will be sold and the proceeds distributed among the artist who created the work, the other artists and the investors. So even if the works of a particular artist don’t become valuable, the overall collection should.
YOU have to KNOW the value of the item whether it be art or coins or whatever.
Thousands of items to invest in and few to make a killing on by amateurs.
Did you spend your life becoming an expert in the stock market?
Honestly, unless you’ve got a lot of time on your hands (and what the other posters have acknowledged), you’re not going to make a killing on art.
Where did you see the 20%/year thing? As noted previously, art is subject to whimsy and may return an average of 20%/yr over the life of the investment, but the value may come within five years before it is sold.
Pretty much.
My grandfather (damn, I miss him) made a pretty good living for himself and my grandmother the last 15 years or so he was alive by dealing in high-end art - but he’d collected for his own enjoyment for at least 25 years before that. I wouldn’t be surprised if my grandmother’s collection is good for at least a million. The seed money for their business came from selling off a few works from their private collection.
Of course, he’d been interested in art since high-school,was extremely well-read on art, was on the purchasing committee for the local museum, bought extensively all his life and had the knack for spotting good artists before they took off. (Nothing pays off better than investing in a young artist’s work. Not that the works themselves gain that much in value - they’re from before the artist peaks, after all - but most artists will remember who helped them break through. And when the entire world wants to buy from them, you’ll be first in line.)
But if you’d asked him, he would insist the value appreciation was never on his mind. He wanted good art on his walls, end of story. If he could sell off a painting he’d tired of and buy himself a really nice car for the proceeds, so much the better.
Ehm - oh yeah, the point: Buy fine art to enjoy fine art. It takes an unholy amount of dedication and effort (and time) to get an economic return.
I had a friend who found a way to do pretty well in antiques and old art. He didn’t really ‘invest’ in them (buying now and hoping to sell later when it was valuable), he just traded them (buy where it’s not valuable and sell where it is). His specialty was buying Japanese antiques and selling them in the US through an online shop.
He was really outgoing and spoke Japanese really well (he’s a white Euro-american), was able to make friends among the antique dealers in Kumamoto, and eventually started getting invited to the antique auctions (old person dies, the grandkids don’t know what to do with all the stuff in grandpa’s house, everything gets auctioned off). His sales niche was about perception: 100-year-old Japanese stuff isn’t really considered special in Japan (and so isn’t valuable), but is considered old and exotic in America. He’d buy stuff that the local guys didn’t consider worthwhile (they sold all their stuff domestically), and sell it online at a significant markup to someone overseas who’d look at a set of 19th-century bowls as something really valuable.
His other niche was WWII-era stuff: uniforms, equipment (canteens, compasses, backpacks, even a town militia air-raid siren), documents, etc. There’s not much of a market for it in Japan, but in the US there are lots of collectors who are willing to pay a lot of money for it. One item he found (that he didn’t want to sell) just blew me away: it was a backpack used during basic training, that the soldier’s family had used afterwards to keep all the letters he sent home. Mixed in with the letters were various notices, reports and certificates from the government about his progress and where he was being shipped off to. The final paper in the bunch was the official letter to his parents that their son had been killed in action.
I should mention that my friend also spent a lot of time learning from those antique dealers, finding out what set a quality item apart from an ordinary one, and how to spot fakes (although to be honest, even the fakes were of interest, since many of them were pretty old and well-made).
Isn’t that a recursive definition?
Art is made by artists who make art…
Not to put words in Shalmanese’s mouth, but I interpreted “art produced by actual artists” as intending to specifically exclude mass-produced collectibles – Hummels, crap-art prints, Thomas Kinkades, etc.
I put $100,000 into a collection of Art Deco stuff…Erte prints, Lalique vases, a few jewelry items, etc., and locked the stuff away in abank vault for 20 years. What kind of appreciation could I reasonably expect?I am assuming by 2025 or so, most of this stuff will be a century old-hence true antiques. Can I paln a comfy retirement on my Art Deco collection??
No, you can’t PLAN to do anything. Art Deco is popular now. In 20 years it could be considered crap and actually depreciate in value (from a re-sale point of view.)
Another thing. How big of a vault will you need to store these items for twenty years? What will the storage costs amount to?
In addition to all fluctuations in the market in depends on where and how you buy. On all levels of the market there are huge markups. For example when households are dissolved even high-quality items are cheap. The downside is that you have to search through literally tons of worthless crap, day after day. Obviously you can’t plan what you will find. You will have to identify all items yourself, as soon as the seller knows what it is, the deal isn’t that interesting any more. Of course there are no guarantees whatsoever.
On the other hand, if you buy from an upmarket inner-city antiques shop, you can get almost exactly what you want as long as you can pay for it. You get nice certificates, from a reputable dealer you will even get good quality. The downside is that you have to pay a price that is far higher than what you could make selling it at that moment. Those shops are for people who buy antiques as luxury items, not for investment.
Of course there are sources in between these extremes, but they just combine the pros and cons of both. In any case, both selling and buying, you need an extreme amount of knowledge and personal connections if you want to get decent prices.