Gold's lost its shine, but art isn't the only alternative...


2015-06-26 13:15:58


Gold's lost its shine, but art isn't the only alternative...

Volatile gold prices have left many scrambling, but art isn't the only collectible worth its weight

"There are two very different art markets. There's the rare end, where Christie's and Sotheby's are selling works of art at around half a million dollars and upwards, and there's the not-so-rare end that people aren't so interested in. You really need to focus at the top end of the art market."

This admission came from The Fine Art Fund Group (TFAFG) CEO and founder Phillip Hoffman in an April interview with the United Arab Emirates' The National.

The interview came amid a flurry of articles published online recently that explore art as the next place to turn for those looking to place their money in alternatives.

With gold prices being so volatile at the moment, it's no surprise investors are scrambling for a new safe-haven.

But what's puzzling me is why, of all the collectible assets to choose from, did these articles single out art?

Sure, it's probably the most high-profile area of collecting - no-one can resist the draw of a record breaking Picasso sale.

But unfortunately, not many of us can afford to spend Hoffman's recommended $500,000 on a blue chip artwork, especially when only 8% of a portfolio is likely to be devoted to alternatives (according to Capgemini and Merrill Lynch Global Wealth Management in the 2011 World Wealth Report).

And art isn't even the top performing asset in collecting, or the second, or even the third for that matter. It's sitting quietly in fourth place, according to the 2013 Wealth Report from Knight Frank.

Classic cars take the top spot, but we all know you have to have a fair bit of money tucked away to establish a formidable collection in that field.

Sitting proudly in second and third place are rare coins and stamps, perhaps the most attractive of all collectible assets. Over the past ten years to third quarter 2012, rare coins have shown an increase in value of 248%, while collectible stamps grew by 216%.

But it's not just increasing value that matters. Coins and stamps also have the greatest liquidity of all collectibles, ensuring that you are able to easily sell them when it's time to part ways.

The collector base for stamps and coins is huge, just look at the amount of philatelic and numismatic societies worldwide for evidence.

I'd bet there aren't so many people regularly spending their money on art.

To top it all off, coins and stamps are two of the most affordable assets when it comes to joining the market for collectibles. The recommended entry-level purchase starts at around $7,000, so don't be deterred by the huge sums quoted in the press - collecting is enjoyable for all, whatever your budget.

View our coins and stamps for sale.

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Paul Fraser

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