In a crunch, don’t forget the classics

Art, wine, stamps and jewellery are booming amid the economic gloom, says Gwyn Jones

First-half results this year for banks might be depressing reading, but it's a different story for the auction houses, which are notching up ever increasing sales in their best-selling categories – including art, furniture and jewellery. As equity markets plunge and rising inflation erodes the value of cash savings, alternative markets are worth a look.

Fine art

World records just keep on being broken in the art market. Sotheby's art sales are up 14 per cent against 2007, Christie's up 10 per cent. The latter's Impressionist and modern art sale in London produced the highest ever sales total for an art auction held in Europe: not a market hit by a credit crunch. There's no squeeze on the finances of the person who paid nearly £41m this year for Monet's Le Bassin aux Nymphéas.

The big growth is from the world's emerging economies: China, India and Russia. But at the lower end, new markets are still emerging within the UK. Bonhams held an urban art sale in February at which 500 people turned up, battling to buy works by artists such as Banksy.

For those of us without a spare £30m or so, there is the option of art funds. These investment vehicles include the Fine Art Fund (www.thefineartfund.com), whose 30-strong team travels the world buying and selling art. So far, the fund can boast more than 20 per cent compound returns per annum. To invest in its general fund you'll need a minimum of £125,000, but that allows you to have a share in a Picasso or a Bacon, something most individual investors would never be able to do. There's even a fine art hedge fund in Guernsey.

Though art has seen some meteoric rises, that might not continue. The advantage is that there is a very limited supply. And if you can afford to buy works themselves, then you get a great painting or sculpture to enjoy – whatever the market.



Jewellery

Diamonds may be a girl's best friend, but they have all sorts of friends in times of economic uncertainty. With gold prices at a record high, investors have turned to another tangible commodity – high-quality jewellery. "Diamonds provide timeless elegance in a fast-moving fashion arena and, in many instances, maintain their worth," says Mich-elle Gonsalves of Bonhams.

The value of diamonds has more than doubled in the past four years; good quality, single-stone diamond rings are commanding particularly strong prices. Christie's have recorded a very strong jewellery market as well; a sale in June realised the highest total for any jewellery auction held in the UK. Jewellery has a worldwide market, which protects its value, but avoid items that are fashion dependent; classics are more likely to retain value.



Furniture

A practical investment that can also be (carefully) used is antique furniture. It's been a mixed market in recent years, though. The Antique Collectors Club's furniture price index had, from its inception in 1968, always beaten other tracked investments – until 2002, when it plummeted. It is the lower end of the market that has fallen: Victorian furniture is 40 to 50 per cent down on 2001, particularly the reproduction Georgian stuff mass-produced in the 19th century.

However, like most areas of the antique world, the top-quality end, where pieces are bought more as works of art, continues to rise. Quality will always sell: the Kenure Cabinet by Thomas Chippendale, for example, sold for £2.7m in June at Christie's, a record for British furniture (in fact, at the same auction, three other works surpassed the previous record). Gonsalves recommends the somewhat more affordable firms such as Gillows, Holland & Sons and Lamb of Manchester.



Wine

Christie's is enjoying its most successful year to date in fine wine. "There has been growing demand from traditional European and American buyers, and a resurgence of Asian interest," says spokesman Rik Pike. James Reed, wine expert at Sotheby's, agrees. "We were slightly worried a couple of years ago after there was a surge of interest in wine investment funds for pension plans, and then the UK Treasury took away the tax-free status – but that didn't have an effect. The credit crunch hasn't had an impact, and we've had a very good year despite wine duty increasing and a fall in sterling against the euro."

Prices are very strong particularly for the blue-chip wines such as the five first-growth Bordeaux chateaux – Margaux, Latour, Lafite-Rothschild, Mouton-Rothschild and Haut-Brion – and the top Burgundies, such as Domaine de la Romanée-Conti. However, Reed cautions that only the top stuff is selling really well.

Buying bottles or cases isn't the only way to invest in wine. En Primeur, offered by some of the top Bordeaux vineyards, allows investors to buy wines as futures. The vineyard will offer an amount of a new vintage at a set price; if it turns out to be a fantastic vintage, then you'll make money.

It is essential, as in all specialised areas, that you invest only with expert advice. One way to do this, as with art, is to buy into an investment fund such as the Vintage Wine Fund (www.vintagewinefund.com). This spreads the risk across a huge range of wines, though there is an obvious downside – you can't drink any of it.

Stamps

Over the past 50 years, rare stamps have averaged an annual return of 9.5 per cent, according to Adrian Roose, investment director at Stanley Gibbons (www.stanleygibbons.com). The company's top 100 stamps index still shows healthy gains for the first half of this year, up nearly 6 per cent. There are about 48 million stamp collectors worldwide, 18 million of them in China. British stamps are in demand as this was the first country to issue them.

Stanley Gibbons offers an investment vehicle for people who don't want to buy their own stamps. It's not a collective fund; rather, you tell the company how much to invest and it chooses the best stamps for you. It recommends only about 200 stamps – the rarest – for investment purposes.

"We can't see any reason why stamps won't continue to rise purely on a supply-and-demand basis," Roose says. "Supply is diminishing; one collector lost a £250,000 collection in a fire, for example. And we keep getting new customers. Ten years ago we had 950 new customers a year; last year, it was more than 23,000."

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

Finacial products from our partners
Property search
  • Get to the point
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

    SThree: Trainee Recruitment Consultant - Swiss Banking and Finance

    £20000 - £25000 per annum + Uncapped commission: SThree: Can you speak German,...

    Ashdown Group: Marketing Executive - 6 month FTC - Central London

    £25000 - £30000 per annum + benefits: Ashdown Group: An exciting opportunity f...

    Ashdown Group: Junior Project Manager (website, web application) - Agile

    £215 per day: Ashdown Group: Junior Project Manager (website, web application ...

    Guru Careers: Software Engineer / Software Developer

    £40-50K: Guru Careers: We are seeking an experienced Software Engineer / Softw...

    Day In a Page

    Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

    Fishing is on Nigel Farage's mind

    Ukip leader casts a line to the disaffected
    Who is bombing whom in the Middle East? It's amazing they don't all hit each other

    Who is bombing whom in the Middle East?

    Robert Fisk untangles the countries and factions
    China's influence on fashion: At the top of the game both creatively and commercially

    China's influence on fashion

    At the top of the game both creatively and commercially
    Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

    The man known as GOD has a reputation for getting the job done

    Lord O'Donnell's three principles of rule
    Rainbow shades: It's all bright on the night

    Rainbow shades

    It's all bright on the night
    'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

    Bread from heaven

    Dutch survivors thank RAF for World War II drop that saved millions
    Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

    How 'the Axe' helped Labour

    UK will be 'run for the wealthy and powerful' if Tories retain power
    Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

    The price to be paid for challenging the rule of extremists

    A revolution now 'consuming its own children'
    Welcome to the world of Megagames

    Welcome to the world of Megagames

    300 players take part in Watch the Skies! board game in London
    'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

    Charlotte Gainsbourg on 'Nymphomaniac'

    Starring in one of the most explicit films ever
    Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

    Robert Fisk in Abu Dhabi

    The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
    Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

    Vince Cable exclusive interview

    Charging fees for employment tribunals was 'a very bad move'
    Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

    Iwan Rheon is returning to his Welsh roots

    Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
    Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

    It's time for my close-up

    Meet the man who films great whites for a living
    Increasing numbers of homeless people in America keep their mobile phones on the streets

    Homeless people keep mobile phones

    A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before