Looking for an alternative investment? Antiques can be some of the safest.
The erratic volatility in today’s markets could make any trader, however skilled, want to throw up his hands, cut his losses and toss his remaining money into a commode. A commode, of course, being a chest of drawers from France, circa 1750.
What, you had something else in mind?
Those looking for a safe, profitable asset that looks considerably better in your living room than a sheaf of no-yield Treasurys should keep in mind that “antiques are a good place to put your money,” according to Mary Helen McCoy, proprietor of an eponymous fine-antiques emporium in Charleston, South Carolina. “There aren’t many of them out there, and good ones will always appreciate.”
Hear that? Always.
There are a few rules to the game, however. To simply qualify as “antique” in the first place, the U.S. government stipulates an age of at least a century; to qualify as “good,” further criteria abound: Is the piece’s history documented? Its authenticity verified? Was it a rare, original and quality piece to begin with? Would someone actually want it in his home? Was it — gulp — stolen? Clear those hurdles, and values tend to increase.
But forget about discovering a lucky find in a weekend flea market. “Shops won’t have what you can collect,” says David Kyner, a Fort Lauderdale, Florida–based collector of antique jewelry. “Auctions are best for that.” And be prepared for a fight. Even in a soft economy, demand is intense: With museums beefing up their collections, and countries like Russia and China eager to recover their lost cultural patrimony, major auctions can degenerate into emotionally raw — albeit well-mannered — war zones. Like the song says, know when to walk away, and when to run.
Scarred by short-term flameouts? Antiques, for better and worse, are the very definition of buy-and-hold. McCoy advises an appreciation waiting period of 10 years before resale; Kyner suggests twice that, noting that the competitive nature of auctions can drive the “hammer price” far higher than a piece’s actual worth.
So while they’ll never supplant a trader’s energy-and-equities mix, antiques do offer some (literal) solidity in an uncertain world. And should things get even uglier, you can always eschew the mattress and, indeed, store your cash in your commode. Unlike many asset classes these days, it’ll still be there when you need it.