Collectibles: A way to invest and have fun at the same time

Desirable objects can soar in value, but you need to know what you are doing to buy and sell wisely.

Are you tired of riding the stock market rollercoaster? How do you fancy putting your money into a crate of fine wine or buying a restored Jaguar E-Type instead? Not only will you get to enjoy the item but you may also be in line for bumper returns.

Welcome to the quirky world of collectible investments. Most financial advisers warn it is easy to lose a fortune if you put money into alternatives, which includes everything from stamps to antiques, but millions of people still include them as part of their overall portfolio.

It is certainly a hugely diverse sector. Some people focus on specialist smaller items like collecting cigarette cards or rare comics, while others like to put their faith in bigger ticket items they hope will make thousands of pounds at auction.

Their argument has been strengthened during the recession with demand remaining strong for really good-quality items, according to Judith Miller from TV's Antiques Roadshow and the co-author of Miller's Collectibles Price Guide.

The idea of buying something tangible, such as a music box or 19th century vase, grew in popularity during the financial crisis as people became increasingly disillusioned with seeing the value of their investments plummet overnight.

"They have done much better than most other investments," she says. "Do you want a piece of paper over which you have no control or something really nice like a table that you can not only enjoy but eventually sell for a good price at market?"

Of course, they are not a guaranteed route to riches. "It is the same as with any other investment," she adds. "If you are forced to sell at a bad time you can lose money, but if you can hold it until the market goes up then you will do well."

However, alternative investments need to come with wealth warnings attached, according to James Daley, money editor at Which? While there is no doubt some items have fetched big money, they need to be treated with extreme caution.

"It might seem like an exciting idea but these investments are only suitable for a minority of investors," he says. "Not until you have a cash reserve and a relatively large portfolio of equities, bonds and property should you even consider them."

Even at that stage people must proceed with care. "You must read the small print very closely as there is not as great scrutiny of these as you get with regular investment funds which means you can be entering the unknown," suggests Daley.

Being able to properly value items can be difficult so research is essential. "You need to ensure you are getting a fair price when you buy – and also when you sell, so you will need to ask plenty of questions before making your final decision," he adds.

So for those people still attracted to the idea, what areas are worth investigating?

Wine

If you can resist uncorking the bottles then wine may prove to be a lucrative longer-term investment, but you need to be extremely careful what you buy.

Investors have certainly enjoyed decent returns in the past from stockpiling a selection of the finest wines produced by the top chateaux of Bordeaux and then selling them for a handsome profit.

In fact, some of these examples have passed into wine investment folklore. A case of Le Pin 1982, for example, cost just £200 when it was released, but was worth about £25,000 a few years ago – a staggering increase of more than 12,000 per cent.

However, investing in wine is a very complex subject so you must put time into researching the area before deciding whether to get involved. As with any alternative investment, the golden rule is: only risk what you can afford to lose.

Sporting memorabilia

Football is the big seller in this area and demand has remained fairly stable over the past few years, according to David Convery of Convery Auctions. "The right things will sell at the right times because people are still going to matches and collecting memorabilia relating to particular players and clubs," he says.

A good idea is to collect items relating to young players that are being tipped for the top. "Look at the headlines to see who is being courted by the big clubs," he adds. "People like Gareth Bale of Tottenham Hotspur are seeing their stock rise."

However, you need to be fairly selective about the items purchased. The sheer volume of autographs – some genuine, some fake – on eBay has dampened valuations severely, but there is still demand for more unusual items.

"If you can get your hands on a player's actual kit, that is what will bring in the big bucks further down the line," he says. "For example, a replica shirt signed by Wayne Rooney is probably worth about £50 – but a match worn version could make £1,000."

This summer's World Cup could also provide an opportunity to make some money, depending on who emerges victorious. "If you are out in South Africa and get some nice items from the tournament – especially relating to the winners – then they could be worth money if you cash them in straight afterwards," adds Convery.

Classic cars

For the real petrol head, the lure of being able to buy a classic car will be almost irresistible, whether their budget stretches from one of the modest hot hatches, such as the Peugeot 205, to a pristine Ferrari.

The good news is that the market for classics has been extremely buoyant over the past couple of years, according to Tim Schofield, the UK head and director of the motor car department at the auction house Bonhams. In fact, nine out of 10 cars coming under the hammer during the first two sales of this year were found new homes.

"If you have got money earning nothing in the bank, view the stock market as a bit hit and miss, and have petrol in the veins, then why not buy an old car?" he says. "It is a tangible asset that is kept in your garage and you cannot put a figure on the fun you get out of its use. Also, as long as you buy sensibly and it does not end up needing a lot of work done on it, it might increase in value two or three years down the line."

Cars increase in value for a variety of reasons. Sometimes it can be a manufacturer producing great modern cars that rekindles interest in their predecessors, while others shoot to prominence celebrating an anniversary for a particular model.

Recently, for example, Maseratis from the 1960s and 1970s have been in demand, as well as Porsches from the 1980s, while Aston Martins have consistently enjoyed decent valuation growth.

"My advice is to do your research and ask questions," says Schofield. "If you have narrowed your sights to a particular make, model and type, then go and see the best car you cannot afford and use this as the benchmark on which to judge the others."

The future success of the sector depends on new people getting involved. "The lifeblood of any business is to keep your established clients happy and attract new people into the sales rooms," he adds. "This year, up to a third of people attending our auctions are new clients to Bonhams, which can only be good news."

Stamps

Building a stamp collection may involve a trip down memory lane to your childhood – but pick wisely and it could end up being a lucrative journey with some unique examples selling for millions of dollars.

According to Geoff Anandappa, investment portfolio manager at Stanley Gibbons, the rarest stamps have delivered annual average returns of around 9.7 per cent, with the prices being driven mainly by collectors.

"These stamps can be a good way of diversifying your portfolios because they do not correlate closely with any other asset classes," he says. "Collectors are buying and selling millions of pounds worth of stamps every day."

The most expensive – valued at US$2.97m – is the 1868 1c Benjamin Franklin Z-grill, owned by the PIMCO fund manager Bill Gross. There is also Sweden's Treskilling Yellow stamp which is coming up for auction next month in Switzerland.

However, even smaller value stamps have performed very well in recent years, according to Anandappa, who cites the Penny Black – the world's first stamp – as a prime example.

"It is not rare as 60 million were printed but unused examples have increased in value," he says. "Five years ago we were selling them for around £4,000 but now they are going for £10,000. However, this is not unusual for rare stamps."

So how should people start? The key is finding a reputable dealer that can help guide you through the process. "I would advise people against buying on eBay or via auctions as they really need to know what they are doing," adds Anandappa. "For example, we have about three million stamps in our London shop but only 150 are recommended for investment purposes."

Contacts

* Miller's price guides

http://www.millersantiquesguide.com

* Invest drinks

http://www.investdrinks.org/

* Convery Auctions

http://www.converyauctions.com/

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

Life and Style
Steve Shaw shows Kate how to get wet behind the ears and how to align her neck
healthSteven Shaw - the 'Buddha of Breaststroke' - applies Alexander Technique to the watery sport
Arts and Entertainment
The sight of a bucking bronco in the shape of a pink penis was too much for Hollywood actor and gay rights supporter Martin Sheen, prompting him to boycott a scene in the TV series Grace and Frankie
tv
Sport
footballShirt then goes on sale on Gumtree
Voices
Terry Sue-Patt as Benny in the BBC children’s soap ‘Grange Hill’
voicesGrace Dent on Grange Hill and Terry Sue-Patt
Arts and Entertainment
Performers drink tea at the Glastonbury festival in 2010
music
Arts and Entertainment
Twin Peaks stars Joan Chen, Michael Ontkean, Kyle Maclachlan and Piper Laurie
tvName confirmed for third series
Sport
Cameron Jerome
footballCanaries beat Boro to gain promotion to the Premier League
Arts and Entertainment
art
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Neil Pavier: Management Accountant

    £45,000 - £55,000: Neil Pavier: Are you looking for your next opportunity for ...

    Sheridan Maine: Commercial Accountant

    £45,000 - £55,000: Sheridan Maine: Are you a newly qualified ACA/ACCA/ACMA qua...

    Laura Norton: Project Accountant

    £50,000 - £60,000: Laura Norton: Are you looking for an opportunity within a w...

    Day In a Page

    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine