part 2

1

Chapter1 : Introduction To Investment In Antiques. 1.1MEANING OF ANTIQUES: An antique is an old collectable item. It is collected or desirable because of its age , beauty, rarity, condition, utility, personal emotional connection, and/or other unique features. It is an object that represents a previous era or time period in human society. Antiques are usually objects which show some degree of craftsmanship, or a certain attention to design such as a desk or an early automobile. They are most often bought at antique shops, or passed down as an estate. Some valuable antiques can be bought from antique dealers and auction services or purchased online through websites and online auctions.

DEFINITION  In the tradition, fashion, or style of an earlier period; oldfashion. Or 

An object having special value because of its age, especially a domestic item or piece of furniture or handicraft esteemed for its artistry, beauty, or period of origin.

2

1.2 MEANING OF INVESTMENT . Investment is the commitment of money or capital to purchase financial instruments or other assets in order to gain profitable returns in the form of interest, income, or appreciation of the value of the instrument.

Investment in terms of Finance: In finance, investment refers to the purchasing of securities or other financial assets from the capital market. It also means buying money market or real properties with high market liquidity. Some examples are gold, silver, real properties, and precious items. Financial investments are in stocks, bonds, and other types of security investments. Indirect financial investments can also be done with the help of mediators or third parties, such as pension funds, mutual funds, commercial banks, and insurance companies

DEFINITION OF INVESTMENT  In finance, the purchase of a financial product or other item of value with an expectation of favorable future returns. In general terms, investment means the use money in the hope of making more money.  Investment is defined as any use of resources intended to increase future production output or income

1.3 WHAT ARE INVESTMENT IN ANTIQUES:

Finding good investments in the antiques market involves the general due diligence principle that applies to sound investing in other types of investments. Learn all that is possible about a specific investment opportunity within the context of the the size of the investment and the overall market and competing markets so thoughtful decisions can be made about whether to buy, how much to pay and when and at what price to sell. Deciding when and at what price to sell are important for any investment because no money is made on an investment until it is sold (except perhaps in options markets which do not apply to antiques in any organized way). They are critical for antique investors because the means and opportunities to sell are more constrained than for many other types of investments such as stocks or real estate. Learning everything possible about a potential antique investment can be intimidating because there is so much to know and the information sources are widespread and sometimes hard to access. Here are some aspects of due diligence for antique investments.

Develop General Knowledge – Consult museums, dealers, experts, other collectors, books, trade journals, magazines and related associations. Take classes, go to lectures and seminars, attend auctions to learn about the type of antiques you wish to buy. Museums, trade associations, colleges and universities offer many educational programs on antiques.

4

1.4 What Makes Antiques So Appealing To People?

Collecting antiques allows people to express their creativity in their home and in their wardrobe. Go through any shopping mall and look at the displays of dishes and other home decor available. Then think about the thousands of other stores with identical displays. Turn on any cable shopping channel and it won't be long before you see a presentation for a jewelry item that's selling by the thousands. Buying antiques for home decor and vintage jewelry for your wardrobe often saves you money and it always gives you a chance to express your unique personality. Some high end collectors are choosing to invest in antiques. Many have experienced losses with more traditional methods of investing, and they like the chance to enjoy their purchases everyday. It's more enjoyable for them to sit on rare couches as they look at art prints while wearing breathtaking gems than it is to have a stack of paper in a lockbox. Many categories of antiques are rapidly increasing in value, but it takes real knowledge to know what to buy that will most likely give you or your heirs a good return on your money. Investing in antiques is not a get rich quick scheme. It requires study and work. Knowledge is definitely power in this type of investing. Just plain fun is a great reason to collect antiques. Antique collecting can be a relaxing hobby. Searching out desirable items either in antique stores or at online auction sites can be an enjoyable pastime. It can add a new level of fun to traveling. Some collectors check the website of the Association of Collecting Clubs and join a collecting club. Clubs are available for everything from antique advertising to buttons to political memorabilia. For nominal dues, club members can enjoy online chats and annual conventions in interesting cities throughout the country. In addition to learning more about antiques they like to collect, club members make great friends with others who have the same collecting interests.

CHAPTER 2 - CHARACTERISTICS OF ANTIQUES AS AN INVESTMENT

An investment in art has a number of unique characteristics that should be considered bt perspective investors. These characteristics vary according to the specific attributes of the art fund.

 Uncorrelated with Traditional Investments One of the primary reasons why investors put their money in Antique investments is because of the desire on the part of the investors to diversify their portfolios. Alternative investments do not usually rise and fall in sympathy with the Industrial Average, as most traditional investments do.

 Lower Liquidity Another characteristic of Antique investments is that their liquidity is often much lower than that of traditional investment products. While the volume of stocks traded on major exchanges allow anybody pretty much at any time to sell his shares, it can take days, weeks or months to find a willing buyer for, say, an expensive painting.

 Potentially Higher Rewards Antique investments compensate for the higher risks of investing in them with potentially higher returns. Private equity funds and hedge funds not infrequently deliver annual returns in excess of 30%, though these high returns are

notoriously volatile. Art, stamps, and coins can also greatly rise in value.

 Non-normal Returns and Non-linear Returns Returns of Antique investments often follow distributions which are non-normal. There can be high positive or negative skewness (probabilities and sizes of profits and losses are very different). Alternative assets tend to record extreme returns (on both positive and negative side) more frequently than traditional asset classes.

 Tax Considerations Tax considerations can be another benefit of alternative investments. Alternative investments, particularly hedge funds and private equity, exploit different ways to minimize capital gain and income taxes for their investors. In 2010, Congress was reviewing a partial clampdown on tax breaks for alternative financial investments. However, tangible alternative investments like art still look likely to retain preferential tax treatment.

CHAPTER 3-TYPES OF ANTIQUES An antique can technically be any object over 100 years old. However, there are certain areas of antiques which collectors tend to focus on due to their desirability and value. An item that is old is not necessarily valuable, as factors such as quality, design and condition all contribute to its worth on the collectors markets. Some antique pieces are always popular, whereas others fall out of favour. It's important to invest in types of antiques that actually interest you and that are always going to be popular in order to make them sound investments for the future. Here we look at five types of antiques that could be considered safer opportunities.

Categories of antiques as investments Precious Metals Gold and silver have been popular since ancient times and there seems no likelihood that this will change. Indeed, with the current financial crisis gripping many of the world's economies, investing in gold and silver is a better option than stocks and shares. There are many different types of silver items to buy, particularly from jewellery to cutlery, but for gold, jewellery is the outright winner.

Coins Collecting antique coins is a good investment, as they just never decrease in value - unless the condition of the coins deteriorate greatly. Unlike fragile china, for instance, there is no risk of the item being irrevocably damaged. Insuring coins won't be difficult and they are one of the most interesting type of antique to collect. Collections can be made up from different periods in history, or from different countries.

Furniture Furniture is another type of antique that can reap dividends for an investor. It can be expensive to purchase and a some knowledge of the most respected furniture makers is a must. Space will be a major consideration for anyone hoping to build up a collection of antique furniture. To keep its value, the furniture cannot be just dumped in the garage.

Fine Art Investing in art antiques is one of the best options on all, especially for someone with a good knowledge of art. Bargains can be picked up at various types of sales, especially car boot and garage sales. Many people will sell paintings for ridiculously low prices, because they have no real knowledge of either the artist, or the value of the work itself. Any art that is purchased will need to be carefully looked after and never put on display where sunlight can affect its colour.

Nostalgia Children's toys are antiques that not only appeal to adults, who will buy such items for their nostalgic appeal, but they are of historic value also. Many people are fascinated by toys that were made in Victorian times and by earlier versions of toys that are still popular. Toys that are unopened are valued highly by antique collectors. When thinking of investing in antiques such as coins or silver antiques, also think about insurance costs. It's sensible to both invest and protect and insurance will help to give peace of mind.

CHAPTER 4-HOW TO INVEST IN ANTIQUES

4.1 BASIC TIPS

Educate yourself Start by visiting museums in your area. ―Regardless of what your budget is, the first thing to do is expose yourself to a lot of different things. That way you get a sense of what you like, and then you can start studying up on it.‖ When you've exhausted the museum circuit, hit shows, galleries, auctions and the Web to continue your research. There are also a ton of books available at your local library on every period and style, from Art Deco to Impressionism to Pop. The goal is to learn how to compare similar artists and pieces, so you can pinpoint what's good, better and best for your own collection.

Cater to your own taste Think about it: Even if you plan to eventually sell the piece, you have to live with it in the meantime, so it's important to find your style before plunking down any money. ―Try to find something that inspires you, that recalls something you liked in your childhood or something that you're currently interested in. There is such a wide range of material available, so you have to find what moves you,‖ While it's true that both art and antiques have historically gone up in value, there's always a chance that the piece you choose will fall flat. At the very least, you and your family can get some enjoyment out of it.

Use a reputable dealer One common denominator throughout collecting is quality and condition. If you have an amateur eye, you need to rely on someone you trust to point you in the right direction, and a good dealer will be more than happy to guide you. ―It's just like the stock market in that blue-chip stocks sell for more because they're secure and dependable. If you buy a fine example of an important artist's work in fine condition, you've got a blue chip,‖. Picking up the piece from a renowned dealer only sharpens your chip, because you'll then have his seal of approval when it comes time to sell. He'll also stand behind the piece, an assurance you might not get from an auction house, which will often put strict limits on returns or even require bidders to buy as is. A substantial dealer will honor your purchase forever. So how do you find one? A good place to start is an antique or art show, or by asking more seasoned collectors for their recommendations.

Look in your very own attic We've all heard the stories of people selling a random painting or table at a yard sale for pennies, only to find out later that it was really worth thousands, or even millions. It's painful. So if you have something that was passed down from your uncle's cousin or your great-aunt, do a little research before carting it off to Good Will, even if it looks worthless. ―One of the great tools that we now have at our fingertips is the computer, and search engines. If you see a name on a painting or on the bottom of a vase, Google it. It's amazing the kind of things you can find if you have any information attached to the piece,‖ If nothing turns up, don't be afraid to contact a dealer in your area for guidance. ―I must get at least 10 e-mails a day from people all over the world because they've seen things on our Web site that are similar to things that they own. I always take time to get back to them,‖

Know how to sell There's no hard-and-fast rule for when to sell a particular piece, and, of course, appreciation rates vary across the board. One idea is to unload

something when you're simply sick of having it around. You want to turn a dime, so it's important that the price is right. In general, dealers don't like to make an offer — they'd rather you quote a price upfront. There's a precedent for nearly everything, says Granby, so do some research on similar pieces and what they've sold for, then consider the quality and condition of what you have. Once you have an asking price in mind, find dealers who specialize in similar areas, or head to a local auction. Finally, one other option that people tend to overlook is making a trade. If you plan to continue collecting, but simply want to upgrade a piece, ask around. A dealer may very well be willing to barter.

4.2 How to inform yourself? 

Read magazines & newspapers

The antique world has its own publications. Start by reading your newspaper's art section for general background. When you visit a gallery you like, pick up any magazines they offer, or ask if the work has been reviewed in any periodicals. A periodical, like Antique news , will help you better understand the trends in the art market. The Arts section of the Sunday edition of The New York Times is another good place for a novice to start, as are The Village Voice and LA Weekly , which both have regular art reviews. Find a trusted advisor There are a number of people who make their living helping you buy the right piece. If you decide to use an advisor (I say if , because advisors are typically available only to those who wish to invest several hundred thousand dollars), make sure you go with someone who can provide strong references. After all, hiring an antiques advisor is like hiring any other professional -- his reputation for success and honesty is everything. Do your homework on them. Such people aren't found in the phone book. Often, antiques advisors find their clients through personal

contacts. By attending shows and talking to people, you'll find the art advisors in your area. In other words, this is a word of mouth occupation.

Sources of Information In addition to other collectors, dealers, museums, universities, art centers and specific associations, many books and periodicals are helpful to the art and antiques investor.     

Antiques Magazine Antiques Quarterly Antiques World Art and Antiques Art + Auction

4.3Are antiques a good investment? We've rounded off the numbers, but very broadly, this is the picture that their data paint for us. If you had bought an average piece of antique furniture for £100 in 1968, twenty years later, in 1988, you would have had to pay £2,185 for it, and , in 2000, it would cost you £3,350. By comparison, the Financial Times Stock Index (the equivalent of the Dow) went from 100 in 1968, to 675 in 1988, and to 1900 now. Do the math: In 33 years an average antique has increased by a factor of 33.5, while the average stock has gone up by a factor of 19. Over the long haul, antiques look a pretty good bet. But perhaps stocks are not the best comparison. Our other big investment is our house. And houses have done better than stocks, but not quite as well as antique furniture. The equivalent numbers for house prices are: 1968: 100, 1988: 1,550, and 2000: 2,850. House prices have increased by a factor of 28.5. As investments, houses have done nearly as well as antiques, and both have way outperformed stocks .

Before antique dealers fax these statistics off to every financial advisor in the country in the hope that they will advise their clients to get out of stocks and into antiques, we need to sound a note of caution. Antiques are not liquid. Their selling costs are around 30% or higher, whereas those of houses are about 5%, and of shares around 2%. The costs of selling an antique will eat up at least three years of its "profit," so financially, antiques are good only in the long term. We're not going to see the day traders rushing into our shops. . A basket of groceries that cost £100 in 1968 would have cost £605 in 1988, and £1,000 in 2000. In other words, the cost of antiques has risen more than three times as fast as the cost of necessities. When the gap between a luxury and a necessity is small, more people can afford the luxury. But as the gap increases, the size of the luxury market decreases. Have antiques priced themselves out of the reach of the sort of people who, twenty years ago, would have bought them? Are antiques becoming the preserve of rich, old people, and are younger couples, the foundation of tomorrow's market, spending their money elsewhere because they perceive that it will buy them more? Or is the price gap actually part of the appeal of an antique? When people can buy the same commodity anywhere in the world, they appear to be willing to pay more for the uniqueness of an antique. There is a shortage of good antiques -- all dealers will tell you that the hardest part of the business today is finding good stuff. Consequently only a comparatively few people can own them. The difference between houses furnished with antiques and those that are not is a multidimensional

difference: it includes taste and wealth but rests finally on exclusiveness and rarity.

Good contemporary furniture may be tasteful and expensive, but it is not rare: Another piece can always be produced to meet a demand. Antiques are not like that. Whatever the state of the stock market, in the antiques market there is always an unmet demand. The more globalized our world becomes, the more that people with certain tastes will desire antiques for their uniqueness. The conditions of the mass market appear to be increasing the number of those people, but there is no commensurate increase in the supply of antiques. This scarcity of good antiques (and "scarcity" is simply a definition of unsatisfied demand) may well mean that the price gap between antiques and ordinary commodities will widen. The reduced size of the market (i.e., its exclusiveness) may well improve the investment qualities of antiques. But one thing is certain: however high or low antiques rank as good investments, no other way investment brings with it the daily pleasure that an antique does. People love their antiques; they buy them in order to live with them, not to sell them in the near future. The low liquidity of an antique, therefore, is not a drawback. It is built in to the nature of the antique. If you love antiques, you necessarily have a long-term perspective, and that's the only perspective from which to view antiques as investments. 4.4Determining the Worth of the Antique.  Determine the date of your antique. There is usually a stamp located on the bottom or back of an item with the date of manufacture. If purchasing your item ask the seller of the date. If neither is available, try to find similar antiques through an online search.

 Check out the library or book stores for pricing guides available in the category of your antique. Everything from furniture to comic books to Disneyana has a pricing guide. This will be your first indication of value.

 Investigate auction sites such as eBay to see if similar antiques are being sold. The true worth of your item will be determined by its value to other collectors. Something that was mass produced and is in abundant supply won't be as valuable as a hard-to-find antique.

 Find a local dealer who handles the same type of antique and ask for an assessment of your item. You can also try visiting large flea markets that might be selling similar items.

 Determine the provenance of your item by knowing the chain of ownership. For instance a set of golf clubs used by President Kennedy is more valuable then just a set of golf clubs from 1960. But make sure you can back up any provenance claim with substantial proof

 Don't Overlook a Mark Whether we like it or not, items stamped with a manufacturer or designer's mark are often worth more than identical pieces with no signature. Use a magnifying glass or jeweler's loupe, if necessary, to make sure you don't overlook a mark that may add value and assist you with further research. With hand painted and hand crafted pieces, finding an artist's signature in addition to a manufacturer's mark is a boon. Be sure to examine each piece carefully for these valuable identifying signs.  Consider Condition One of the most important factors to consider when you value an antique is condition . Even when you locate an item in a price guide, if your piece isn't in comparable condition the point is moot. Take all flaws into consideration including

chips, cracks, excessive wear, tears, stains and missing components. Is it a minor nick or major crack? Basically, look for anything that keeps your antique from being in like new or "mint" condition and take that into consideration when determining value.

 Is It Common or Rare? There are times when an extremely rare antique with condition factors will still be worth quite a good sum. For instance, if you determine that you own a piece of Newcomb pottery with a hairline crack, it may still be worth quite a nice sum. However, if you own a cracked piece of Frankoma pottery, it probably won't hold much more than decorative value. If you're not sure about how rarity plays into the area you're researching, check with an expert in that field before discarding a damaged item.

 Old Doesn't Always Mean Valuable Much of an item's value lies in the buyer's demand. There are many items over 100 years old now that aren't in high demand. Take birthday greeting postcards from the early 1900s as an example. Many many of these postcards survived over the years making them too common to hold much value. On the other hand, if you own a hard to find Santa Claus postcard of the same age, it's likely worth more. There are times when a single Santa postcard can be worth $75 or more to an avid collector or dealer.

 Is it Real or Fake? If an item has been in your family for many generations and you know the provenance, you can feel reasonably sure you're dealing with an authentic antique. But if you purchase an item at a shady flea market, many times you'll have to authenticate it before you can truly determine the value. Look for telltale signs of wear and age, along with discrepancies in marks and signatures. Subtle details can often provide clues to the true age of an object. Use black light testing as a place to start.

 Has It Been Restored or Repaired? Professional restoration can add value to a rare antique, but amateur repairs affect value negatively in most cases. It's important to evaluate a piece to discern whether it has been haphazardly repaired or the original value-adding "patina" has been removed. If glue is present, solders are easily detected, or chips have obviously been ground down, an antique or collectible should be valued accordingly. Minor repairs may not affect the value of a piece at all. Ask an expert if you're not sure.

 Does It Have Salvage Value? Just because an antique or collectible is broken or damaged doesn't necessarily render it totally worthless. Many dealers will buy items they can repair or use for parts to repair other pieces. Severely damaged antiques are sometimes transformed by those clever at makeover projects, or crafters will purchase them for supplies. Depending on the extent of the damage and the item's relative usefulness, it may still hold some value. It's wise to check around before banishing it to the dumpster.

 Consider Current Market Influences If you've located an item in a price guide or auction results, does the information reflect current markets? Prices for antiques and collectibles can fluctuate widely and quickly depending on current demand. Prices may drop down to predemand levels once the boom has passed, or they may remain high due to diminished supply as dealers have difficulty replenishing inventories. It's important to watch the markets in your favorite collecting categories and stay on top of valueaffecting trends.

 Ask an Expert Friend for Advice Many times when you're watching Antiques Roadshow, appraisers will indicate they've consulted with their colleagues when determining values. This happens in the non-televised world, too. Don't be afraid to ask a well-versed friend or a dealer you trust for their opinion. Sometimes your educated judgement will overrule what they've shared, but it's good to get the advice of others when you're feeling a bit uncertain about valuing an item, especially those seldomly seen on the secondary market.  Think About Common Values for Common Pieces Appraisers most often value antiques based on the median value rather than the highest or lowest prices realized for similar items. There are times when a piece will sell very high at auction, but the same item will bring a more moderate price at an antique show. In the same vein, items aren't valued based on a bargain garage sale buys either. Rarities are more difficult to value, however. The most recent selling price may be a good indicator of expected market value when pricing a rare item.

4.5How to decide how much An Antique will cost? How the Pros Value Antiques As uncertain as valuing antiques can be, appraisers do value them every day of the week largely by looking at comparable values. Ideally, finding a number of recorded sales for exactly the same piece you’re researching would yield a fairly accurate valuation. You would discard the high and low values, and average the remaining figures. Many times, live auction results (a number of which are available online now, although some services of this nature are fee-based) are used for this purpose.

In reality, appraisers are oftentimes lucky to find one sale record for an item exactly like the one we’re researching at any given time, much less several. Appraisers branch out a bit to include similar items fairly often, especially where antique furniture is concerned. You can do the same thing yourself, again, with some time, patience, and guidance.. Where to Begin Your Valuation Quest Online You can start your valuation research with the list of valuing resources located on this site. You’ll find price guides, articles, and links to help you do your own valuation research, and some suggestions for online appraisal services, if you choose to pay someone for an "estimation of value" (not to be confused with a professionally written appraisal) instead of doing the work yourself. Keep in mind when using online price guides that many of them reflect a point in time rather than an average selling price. They are simply guides, as the name implies. Visiting online auctions to look up past results or logging on to a large online antique mall (TIAS.com or RubyLane.com, for example) and searching the inventory for comparison pricing are two more convenient ways of assessing approximate value. You’ll want to keep in mind that online pricing can vary widely from dealer to dealer, and the price they’re asking for a piece might not equal the negotiated value when it eventually sells. And sometimes, especially with online auction results, prices reflect values far less than what dealers tend to ask in brick and mortar shops and at antiques shows.

Using Books for Offline Research You can always research the old-fashioned way by seeing what types of books on antiques and collectibles are available through your local library. Or, make a trip to a large bookstore locally and see what you can find there. Building a reference library of your own isn’t a bad idea either, especially if you seem to be researching the same types of objects over and over. When you’re utilizing books to research prices, even if you find the exact same item shown in the same condition, remember that the values listed are often higher than average and you might not actually be able to sell an item for that hefty price. Authors sometimes use erratic

auction prices in their valuation averages, which, for better or worse, can dramatically skew the results. Values also vary from coast to coast and from rural to urban areas, so where values are obtained also makes a vast difference. In other words, an antique may fetch a much higher price in New York or Los Angeles than it would obtain in Omaha or Des Moines so the author’s locale or favored selling venues can play into the equation.

Wholesale Values Compared to Secondary Market Values If you’re seriously considering selling an item after you’ve researched its estimated value, the venue and to whom you are selling does make a difference. If you’re selling to an antiques dealer, expect to get a wholesale price of approximately one quarter to one half of what you would ask as a secondary market retailer. Why? Antiques dealers usually have overhead to consider and they may have to hang on to an item for years until they find the right buyer to get top dollar. The upside is that you can turn your wares into cash more rapidly selling to a dealer.

It’s also wise to keep in mind that common items sold in online auctions often bring lower values, sometimes even lower than wholesale, when compared to what you could ask for the same piece as an antique mall or show dealer. To get the most for an antique or collectible, selling directly to the secondary market consumer in an offline venue is usually the most lucrative method. There are exceptions, however. If you’re hawking a rare item or hot commodity, online sales can reach more buyers and usually bring in a higher price. Remember that researching the best way to sell your items will be one last step in determining their ultimate value.

4.6 Is Investing in antiques a good investment? Yes and no. The truth is that you can make money in it, but you can't always count on it. That's true of stocks too, but if you're a numbers person who wants tons of stats, antiques investment probably isn't for you. Just remember; the hottest thing can be considered valuable one day and junk the next. But whereas the stock market will point you to a series of logical business failures to explain that result, all the antiques world can say is that taste changes .it goes according to the fashion and trend impact on antiques.

4.7 our "dos and don'ts" guide to investing in antiques.  Do... seek potential investments from both auction houses and private dealers. If you choose a dealer, ensure they belong to a professional association.

 Do... check the provenance: verify the origin of the painting before purchase. Do not rely on an auction house or dealer to do this.

 Do... verify the seller. Do not be afraid to ask questions about the vendor as well as the painting itself before making a purchase.  Don't... invest in stolen goods. Search stolen art databases, such as the Art Loss Register on www.artloss.com to ensure potential purchases have not been stolen.  Do... beware of war-looted art. Many pieces of art were stolen during the first and second world wars and others throughout the world. Make relevant enquiries.  Do... beware of illegally exported art. Such works might prove difficult to re-sell and foreign countries might try to claim them back. You could find yourself at the receiving end of a lawsuit. Ask to see export licences before buying.  Do... take independent advice. As with any major purchase, verify the value of the painting through an independent expert.  Don't... forget about insurance. Make sure that you understand exactly when risks pass from seller to buyer, and make sure you have adequate insurance in place from that time.  Do... make sure your investment is stored and maintained properly to prevent it losing value

4.5 COLLECTING METHODS AND INVESTING IN HISTORICAL ANTIQUES.

Collecting is a non-specific science. The methods, but not the information, used to collect in one area is usually applicable to collecting in another. There are steps you have to take to understand how, what, and when to collect. If one just goes out and starts accumulating "stuff" then there is no order or flow to building a high-grade collection. During the past twenty years, many investors have collected in several areas: gold coins, Winchester rifles, antique fishing lures, surgical and amputation sets so that they know how to collect know 'how to' collect. One typically can't just decide to start collecting and then randomly buy an expensive historical collectible. First, you could go broke and second,

more than likely you would buy a bunch of . pretty junk. Not the way to start Museums preserve historical pieces just like individual collectors, but museums hire staffs who assemble collections with great care and study. Great collections are built on knowledge, study, perseverance, a good deal of luck, and money. If you read about anyone or organization who built a great collection, be it art, or otherwise, it was always done with someone in the chain acting as the "knowledge" base. Someone has to know what to buy and why. Whether it is a dealer with connections or the collector him or herself, the knowledge aspect has to be there. Knowledge can be the result of long-term experience or dedication to the accumulation of a specific area. There are collectors who build collections by themselves, who study and assimilate information. But there are precious few collections which are not built on a strong base of information. This is why collecting tends to follow the publication of knowledge in one form or other. In the past, it was books, now it may be the Internet. If you decide to collect in the high-end of any collectible, who are you going to look to for verification and advice?

There is another type of collector who just walks into a show, approaches a collector who has a display they want to buy and says:..."how much?" The owner says: "it's not for sale." And the 'buyer-collector' says: "No, you don't understand. How much do you want? Price is no object." This kind of collecting requires no knowledge, just money. It's not collecting, it's shopping. It also tends to be self-limiting, because there are not many collectors who will sell under those conditions and the buyer soon burns out. There are individuals in the current market tossing around six digit figures in the desire to buy whole collections or "invest" in the antique market. They usually pay too much, get less than they paid for, and go away after a short burst or when they figure out they are the laughing stock of the hobby. Part of the fun of any collecting is figuring out what is rare and what is not. For some people, possession of something other people want is a driving force. There are collectors who just collect what appeals to them personally and that is fine, but when the time comes to sell their collection, one can only hope their tastes are shared by others who want to own and possess similar items. Otherwise, you don't have an auction, you have a garage sale. Another dark area in this hobby is the problem of dealers or individuals "sticking it to" the high-rollers who don't know what they are doing. It's almost a game for some people to see if they can get so and so to buy a repaint, a fake, or an over-priced item. Most of these transactions occur behind the scenes, so most people never know about it. The high-roller gets stuck and the seller laughs up his sleeve. No one ever said this was easy. This problem is common in any antique area. It is why you have to develop relationships and not just buy at random. There is no sure fire way to protect yourself from a fake or an over-priced piece except by experience or by hiring a knowledgeable "buyer" to run interference. Collector specific shows exist to assemble collectors so knowledge and friendship can be shared to the mutual benefit of one another. It also exists so collectors can make connections, friends, and ultimately buy something for their collection. With the advent of eBay and the Internet, the connections aspect is all but eliminated. Now, you just sit at the computer, place a bid and hope for the best. The question comes to

mind: how will knowledge be accumulated if there are no friends to call? Who will closet collectors call to ask a question? What if there are no shows to attend to shop and compare values and condition? Is any

hobby to become dominated by a host of closet collectors buying blindly on the Internet and basing their bids on past prices realized? We know a strong economy drives the values of collectibles... be it fishing lures or art. Good times bring individuals with disposable cash and strong urges to collect. Bad times do just the opposite. What do we have to look forward to for the next ten years relative to collecting lures? With the habits of the baby boomers well documented, there can be no doubt that collecting of all kinds will increase, not decrease. It is my personal opinion that collecting will gain strength as more knowledge is disseminated via the Internet. More lower-end collectors will migrate into older and more expensive material as they gain knowledge about what to collect and learn to appreciate the history of the early material. As older collectors sell their collections, prices will rise, bringing more interest and attention. By example, I collect antique fishing lures and can use that area as an example. If you want to get started in collecting lures, my recommendation would be to start out slow and easy by attending as many shows as possible to look and learn. Don't buy when just starting out. Look long and buy later. There is no better way to start your education than by looking at massive numbers of lures and getting a feel for what is available. Older collectors will usually not sell to someone they don't know. It's the "good old boy network" in its finest form. But, sometimes, money talks when an individual wants to move a large collection all at once. It happens and it's luck when you find out about it and are able to participate. Again, friends and connections are the key. If in doubt about how and what to do about collecting in general, start by reading every book you can find on the topic. With all the on-line book stores, there is just no excuse for not owning all the books on the area you wish to collect.

CHAPTER 5– THE REASON ONE SHOULD INVEST IN ANTIQUES

Why should one invest in antiques? Is investment in antiques beneficial? what are the reasons one should invest in antiques? Is art a good investment? These are some questions which most of the investors might think of .artifacts is not the only asset class towards which an investor looks ,but investing in amtiques is quite profitable for long term investment perspective. Antiques are an asset class by itself, just like say commodities, equities or government bonds. But like antiques, wines, cars, it is not a mainstream asset class, but rather an alternative asset class providing an alternative to more common assets like equities. However, unlike many asset classes, Antiques are something that you can touch, feel and enjoy right from the comfort of your living room at home. Here are some features of Antique assets Why does art get priced the way it does? Well, the short answer is its difficult to tell. But, because the market is not very deep, i.e., there are not too many buyers and sellers, it is hard to get a good handle on price. As a result, the prices in the antique market can be very volatile and unpredictable, exposing you to risk .there is too much of transparency involved

5.1.So, should one be investing in Antique? Like all things in life, you need to focus on the basics first. You need to walk before you can run. Similarly, when it comes to investing, make sure that you get the basics in your portfolio right before you venture into Antique investing. When we refer to the basics, we mean two things: 1. Fulfill your "Foundation Goals" first: Before you get to "Lifestyle Goals" it’s important that you have adequately taken care of your basic goals such as your housing, protection (insurance) and family needs (education, marriage). 2. Build a strong foundation in your portfolio: Just like a house with a weak foundation is risky, so too is a portfolio that is built on shaky investments. Your investment portfolio should be built on high quality mainstream assets and not alternative investments like say antiques, fine wines, or Art. Once your foundation is in place through safe/stable investments that provide ample liquidity and is a source of recurring income and capital appreciation, only then should you consider alternative assets.

Even after you have taken care of the basics you should consider Antique as an investment only if you like the work that you intend to buy. This way even if you are unable to sell the investment at a profit you will at least be able to derive "psychological income" from it.

After an investor has taken care of the basic investments, he can go towards antiques, investment in antiques is expensive and is mostly done by high class earning investors ,but even a middle class investor can invest in various investments like ancient coins ,notes, paintings, pottery, some old books .such investors should only choose what they like ,because even if the value of that particular antique depreciates in the market ,due to some reason there are chances of it getting appreciated again. Even if the value of the antique decreases, the investor would not take it as a loss because he has purchased something what he likes and does not mind keeping it for lifetime.

5.2WHY ANTIQUES? One of the best financial reasons to buy a quality antique is that antiques are durable. For the most part even the most expensive, newly made items will still come up short in comparison to the craftsmanship and quality of materials found in antiques. Of course there are plenty of delicate antiques not suitable for regular use, but there are many that can grace your home and still be useful. Solid wood furniture, pottery, glass, textiles and even plastic were all made of higher quality in the past, and you can purchase antiques at a lower price than you might expect. Many of the antiques I use every day I bought for a comparable price or less than the same type of item new! Sometimes people see antiques as ―used‖ but I like to remind them that if something lasted 100 years it will probably last 100 more. Can you say that about anything made out of particle board? You won’t regret buying quality.

Another great reason to compliment your home with antiques is that they offer trend-proof decorative impact. If you look through the home decor magazines you will often notice a creative mix of antiques, vintage and new pieces in a room. Some antiques are repurposed for modern living, like light fixtures, fireplace mantles and bathroom vanities. Other fine antiques are stand out pieces that compliment any decor. The playful balance between old and new adds interest to a home as well as personality. Countertops and paint colours may change, but a timeless antique will find a place in your home no matter what the style of the day. Along those same lines, remember that antiques are the financial investment you enjoy. You can play the stock market, or invest in gold, or keep money in a savings account. But can you hang any of those investments on your wall? Can those investments become part of your home and family life? Aesthetic beauty is very important and people who buy antiques love living with them. Antiques are a way to hold some money in an object that benefits your life and your pocket. If the time comes to liquidate you may be able sell your antique and recoup the money (or make a profit). You can have your cake and eat it too! So if antiques are high quality, beautiful and usable objects, are they a sure-fire good investment? Well, that’s the million dollar question. The truth is antiques are thought of as a speculative investment, best taken with a long-term approach. The value you get out of an antique is also usually proportional to the price you paid – higher quality means better return. Unlike what some of the TV shows imply, it is unlikely you will buy very low and sell extremely high. Antique values can fluctuate over time, due to factors like trends in the market (supply and demand), as well as the context in which you bought the antique. Try to avoid the red-hot styles of the moment, as these pieces will be selling at a premium. Conversely, if you can anticipate a future interest you may be able to make a good profit by waiting until markets change. The best advice when buying an antique is to buy what you love at the best quality and condition you can afford. Buy your antiques from a reputable dealer , and know the basics about what you are buying. Never be shy about asking questions. Many dealers and other collectors are happy to share both historical context and practical knowledge (cleaning, repairs etc) about the antiques that interest you. The understanding about what you buy, after all, is a huge part of enjoying

antiques in general. Start small and don’t worry that you’re not an expert. If you find a particular style or type of antique to your liking, start building a collection. As you develop your collection you will naturally learn and that will in turn make you a better buyer and smarter investor. Finally, no matter what you can spend, or choose to buy, antiques are a finite commodity. They aren’t making any more of them! If you buy quality and beauty, that object will always be in demand and that is a smart financial decision.

Chapter 6 The Most Common Antiques Scams and How to Avoid Them

Whether you're buying or selling, or considering investing in an antiques project, here are the antiques scams and pitfalls to look out.In most cases, these antiques scams involve unscrupulous dealers or auctioneers but we want to stress that, although the risks are real and very significant, the vast majority of sellers are honest and reliable. Hereby, we spotlight the main areas where antiques scammers are at work, and we provide some tips on how to spot and avoid them.

1. Reproductions sold as the real thing This is probably the most common form of antiques scam, especially with furniture, paintings or musical instruments. There's nothing wrong or illegal about copying, and plenty of people make an honest living from doing so. The crime is in passing off the result as an original. There may be telltale signs, like evidence of use of electric tools or modern craft techniques or materials. However, experts are also at work, often using old wood from cheap antiques and applying the same methods as did the craftsmen of old. In some cases, it's virtually impossible to detect the difference. Forgeries are referred to as "repros" (not "reproductions" which refers to items that are clearly identified as copies). Many of them originate in India or China. Key actions: Buy only from reputable dealers or auction houses. Watch out for prices that are too good to be true. Have big-ticket items independently verified and appraised.

Don't buy valuable items sight-unseen without some agreement on approval or escrow. You can find more about online auctions on our site.

2. Forged autographs and phony Certificates of Authenticity Although not strictly fitting the definition of "antiques," collectible items like autographs attract the same type of interest -- and the same level of scams. Con artists may forge signatures and pass them off as the genuine item. Or they may use misleading wording like "George Washington signature" or "hand-signed Abraham Lincoln," implying it's an autograph but not specifically saying so. Increasingly, unscrupulous sellers offer supposed Certificates of Authenticity that seem to vouch for the genuineness of the item -- not only autographs but also other collectibles and memorabilia. But these are often worthless, computer-generated documents. They don't prove anything. Actions: Carefully check the wording of sales descriptions and the signature method (for example, felt-tip pens were only introduced in the 1960s). Be careful about accepting Certificates of Authenticity without other "provenance" (proof of an item's history). 3. Bidding rings and price fixing at auctions Crooked dealers and auctioneers use two tricks to score a big profit at the public's expense. First, a group of dishonest dealers agree not to bid against each other. Only one of them bids, and, if the auction is poorly attended, is likely to win the item at way below value. The ring meets after the auction and one member may then buy the item for something approaching its real value. The difference -- the profit -- is split between the ring members.

In the second of this type of antiques scam, unscrupulous auctioneers plant shills (bogus customers) on the floor to artificially bid up the price. If the shill unintentionally wins the item, it is set aside by the auctioneer to be offered again at a different sale. Key actions: Work with reputable auction houses and watch for suspicious behavior at under-attended sales. Note if the auctioneer keeps putting items to one side after selling -- evidence that a shill won the sale.

4. Under-valuation or low appraisal Most people who know or suspect they have a valuable antique really have no precise idea of its true worth. They may find information online or in a price guide but only an expert dealer will know how much an item is likely to fetch if sold. Anxious to make a juicy profit, a crooked dealer might undervalue the item, drawing attention to minor faults or by saying there's little or no demand for this particular category at the moment.

In other cases, where owners are not sure about the collectability of an item, a dealer might dismiss it as worthless or of low value. In both cases, they would offer to take the piece off your hands for around their appraised value. Of course, they'll offer it for sale at a much higher price later. Key actions: Never sell to a dealer you don't know or haven't checked out carefully unless you're sure of the value of your antique(s). If in doubt, get multiple appraisals. Check online for sales prices of similar items. 5. Consignment sales This antiques scam is almost unknown. Here, a dealer offers to take one or more items on consignment and remit payment when they're sold.

Typically, this will be done with older people who are down-sizing their homes or where there's a divorce or other type of forced sale. The risk here, if the dealer is dishonest, is either that you may not know how much an item really sold for or you may not even know it sold. In the case of an elderly owner, if that person subsequently dies, relatives may not be aware that items from the estate have been consigned and a shady dealer won't bother to tell them. Key actions: Keep a photographic record of any items sent for consignment sale and ensure others know about your actions. If possible, regularly visit the dealer to eye-check your stuff. If it sells, ask for proof of the sale price.

6. Stolen goods Antiques theft is big business. And, in the age of the Internet, "fencing" (selling stolen goods) is easier than ever. At the high end of the market, especially in the art or antiquities worlds, pieces may be stolen to order, disappearing into private collections, never to be seen again. However, stolen items are sold at all levels of the price scale, and buying antiques from unknown or questionable sources is risky. If an item turns out to be stolen, you have no legal right to keep it. It must be returned to the legal owner and you stand the loss, unless it can be recovered from the thief or other seller -- which, it has to be said, is highly unlikely. Key actions: Beware of bargain prices. Ask for proof of ownership. If you have even the slightest suspicion an item may have been stolen, don't buy.

7. Bogus investment opportunities As with all investment fraud, business scams in the antiques world usually involve the promise of a high and quick return. In a recent case, for example, investors were offered an 18% return within 30 days for putting their money into a scheme to buy up huge lots from estate sales which would then be split up and sold individually for a big profit. That was the theory. But the money simply disappeared or was used as part of a pyramid scheme to pay off earlier disgruntled investors. Key actions: Check out the credentials of the person or firm running the investment. In the case above, the scheme organizer had a criminal record for similar scams. If they don't have a track record or if the opportunity seems to offer an unbelievably high return, don't invest without some further corroborating evidence. Be sure to get professional financial advice. In most cases, common sense is the main weapon for defeating antiques scams. Are the prices or the opportunity to make a fast and easy profit too good to be true? Does the dealer/auction house enjoy a good reputation? As ever, in the never-ending battle to beat the scammers, it pays to do your homework -- both in terms of knowing the people you're dealing with and learning more about the items you are trying to buy or sell. You may never become an expert but even a little knowledge will stand you in good stead.

CHAPTER 7- PROS AND CONS OF INVESTMENT IN ANTIQUES.

ANTIQUES investing can be a great way for the fine art lover to make a little money doing what they love. It can also be a risky venture that an inexperienced investor could find financially crippling. There are many advantages and disadvantages of art investing. Before you jump in with both feet and your family’s nest egg, make sure you have weighed all the facts. It’s not right for everyone, so do your homework and know the pros and cons. Antique investing involves a tangible asset that can be appreciated on your wall or kept in storage for buying and selling only. No matter what you do with it, investing in this type of commodity offers a certain level of security. The stock market and economy rise and fall, and an investor can lose every dime they’ve put in. With art investing, unless your piece is physically damaged or destroyed, you still hold some value in your portfolio The tangibility of your portfolio when antique investing is not always a positive attribute. Investing in standard stocks and bonds can be a short term investment with quick turnaround. Antique investing is different because it is more difficult to buy and sell; you can’t just sign onto a website or make a call to your broker. Your portfolio may contain many classic and valuable works of art. Without a buyer, it could take much longer to sell your assets. The liquidity of art investing is much less than financial investing. Additionally, buying artwork is much more involved and can take more time and research than the financial market. You may look into a financial security and find out if it is reliable before you invest in it, but the level of examination with art investing is much greater.. For some, however, the research that comes with antique investing is the best part. Antique investing is something that everyone can do, but that

art lovers truly enjoy. They purchase the items as a way of adding culture to their atmosphere. Any profits made from their purchases are simply icing on the cake. One difficulty in the research and work involved in antique investing is due to the large amount of fraudulent pieces that have infiltrated the market. Anyone interested in protecting their investment and their finances must have a keen eye for originals and counterfeits. If you are unable to spot them, then you must be willing to pay experts to do it for you. Either way, you will soon find yourself in the midst of a scam if you trust every proposal that comes across your desk. There will be advantages and disadvantages to any type of investments you consider. Antique investing fundamentally similar to the other methods of investing, but there will always be vast differences. The best way to hedge your losses and protect yourself from the drawbacks of art investing is to diversify your portfolio with other types. A well rounded portfolio that includes both financial and art investing items will provide a sound financial future As with any highly specialized field, there is a good deal to learn before investing. There are disreputable or uneducated dealers who will be happy to sell you a pig in a poke. Armed with knowledge, you can make educated decisions apart from what someone is telling you. Always look for a provenance or chain of history to your collectibles. Anyone who has watched the Antiques Roadshow knows that appraisers always ask about how long an object has been in the possession of the owner, where the owner got the object, and whether the owner has any documentation about the origin of the object. In the world of treasure coin and antique collecting, ask whether an item you want to purchase has a certificate with it. That certificate should tell you on which wreck the object was found and by whom. While owning hard assets helps diversify your portfolio, for the most part, those assets won’t appreciate overnight. Plan to hold on to your investment for at least five years. This is a long-term approach to your

savings program, and it will produce sound results when you finally decide to sell.