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Economic Woes Got You Worried?
Many of us are worried about the current financial crisis. You may think now is not the time to be buying antiques and collectibles. We might have thought the same thing, but what we have been seeing in the market recently is just the opposite. Prices at auction houses have never been higher, both in Europe and at home in the US. It is not only expensive items being bought by wealthy individuals, but many of the more ordinary items normally bought by middle class collectors. We have heard a number of collectors say they would rather invest their money into antiques than Wall Street or conventional investments because of their intrinsic value and the fact that historically they increase in value and are a good hedge against inflation and economic fluctuations. Besides, pulling out the prized collectibles is far more enjoyable than looking at your bank statement. Our sales are up and we are selling more high-end items than ever (most of which never appear on the website). The biggest challenge we face is not in selling our inventory, but rather in finding quality pieces to buy at a reasonable price. When attending European shows and auctions, we see ridicules prices being paid by Russian dealers and collectors- often many times more than similar items sold for only two or three years ago. While common with the new Russian wealthy class, it is not unique to them. At a recent California auction we witnessed one American spend over $100,000 on cowboy holsters. That should make us all feel a lot better about the items we buy!
We often find collectors who consign or sell back a piece that they bought from us in the past. Usually they do so at a profit. Many items we sold 3 or 4 years ago we only wish we could now buy for what we originally sold them for. A wealthy collector recently told us that in times of financial hardship, when his other investments were losing money, he was always able to make a profit and get through the tough times by selling off a few pieces from his collection. One more thing to consider; if you have earnings from stocks, bonds, real estate, etc. it will be reported to the IRS and you will have to pay taxes on it. If you sell an item from your collection and make a few bucks on it that won't be the case. We are certainly not encouraging anyone to spend their mortgage payment on collecting, but experience has shown us that any disposable income is often wisely invested in antique collectibles, and arms and armour has historically been one of the best performing. There is always a market for quality pieces.