Beware of the trinket trap

That summer holiday euphoria can lead to a rush for dubious investments , warns Jean Eaglesham

Beware if you intend to go bargain hunting on holiday this year. You may see yourself as an intrepid traveller unearthing cheap ethnic artefacts and antiques, or even picking up vintage wines at knockdown prices.

But while there are a few - a very few - genuine bargains around, these are usually heavily outweighed by what might politely be termed coach- party fodder. These include "rare" coins of dodgy provenance; Turkish carpets that cost double what they would at Camden market; ancient Chinese earthenware that is actually two-a-penny; and fake gemstones. To add insult to injury, tour guides who direct you to the stalls and shops selling this stuff are usually getting a cut of at least a third of anything you spend. As Simon Caulder, the Independent's travel editor, says: "Unless you really know what you're doing, you're almost invariably going to be ripped off."

For example, David Scully, from Nordstern Art Insurance, says: "We often have to tell people wanting to insure something they got on holiday for a lot of money that not only is it not worth much, but it's likely to be worth even less in years to come."

Of course, there are some areas in which you may be able to make a killing. John Myers, of London-based alternative investments research firm Solon Consultants, believes that there are opportunities to buy Chinese artefacts in Asia, provided you know what you're doing.

What is more, as Mr Myers points out, the UK-based dealers have a vested interest in advising their clients not to buy abroad, given that they are taking a "perfectly reasonable" commission. But paying that commission buys you a far higher degree of legal protection than you would get buying abroad - antiques sold in the UK must, for example, be fairly and accurately described - as well as access to the dealer's expertise. It also avoids some of the potential pitfalls, including:

o That holiday feeling. It's easy to suspend your critical faculties on holiday and shell out for something that you would not look at twice back home. David Roberts, the Basingstoke-based buyer for wine merchants Berry Bros & Rudd, says: "It's very easy to be sucked into the romance of a region when you're tasting wine abroad.

"It's amazing what a rainy day in Basingstoke can do to bring you back to reality."

If you do want to buy wine as an investment, buy the best you can afford and buy it as young as you can. This generally means going for a Bordeaux claret of good vintage from a top chateau. If you buy the wine en primeur (in the spring after the harvest), when it is at its cheapest, it won't be bottled and shipped to Britain for two years, and it may not be at its best for drinking for anything from three to 15 years.

o Not comparing like with like. There are whole industries in Asia and the Far East devoted to making copies of Western goods. Jan Havlik, jewellery expert for London-based antique dealers Spink & Son, cites for example: "Van Cleef & Arpels-style bracelets [a jewellery name bracketed with the likes of Cartier] which, because of the cheap labour costs, may sell for pounds 5,000 to pounds 10,000 in Thailand compared with more than pounds 100,000 for the genuine, much higher quality article sold in Paris." As something with a decent resale value it is a non-starter since investors, at least at present, will not touch imitations.

o Fakes and forgeries. This is a huge problem in many countries, in particular with antiques. "A lot of people in the Far East see forgery as a way of revering ancestors by copying what they did, rather than as being something wrong," explains David Scully, of Nordstern art insurers. There is also a growing market in fake Russian and eastern European religious relics.

Even if the item you buy is not a deliberate forgery, it may not be exactly what it purports to be. The UK hallmarking system for gold is "second to none", but gold bought elsewhere may not be as pure as the hallmark implies, according to Jan Havlik.

o Assuming that buying locally will save money. If there is an international market in a commodity, you will generally pay the same price wherever you buy. There are also some items on which you can actually save money by buying at home. Arto Keshishian, of London-based rug dealer Keshishian, warns, for example, that "people often pay a higher mark-up on carpets in Turkey than they do at Harrods."

o Export and import restrictions. Be wary that you do not fall foul of the customs officials on your way home, particularly if you are buying antiques. Italy, for example, has tough controls on antique exports, while Russia has reversed its previous laissez-faire stance to the rapid plundering of its national heritage that followed the end of the Cold War. "If in doubt, always check with the authorities what you can and can't take away," says Mark Dodgson of the British Antique Dealers Association.

Watch out, too, for the import restrictions on wildlife. The controls on trade in endangered species are being toughened up - the numbers of goods seized by UK customs officials under the wildlife protection regulations soared from 13,000 in 1993/4 to more than 30,000 in 1994/5. Banned, or partially banned, items include ivory (sold in particular in Africa and Asia); leopard skin and other spotted cat furs (sold in countries such as Greece as well as Africa); coral or tortoiseshell jewellery and combs (sold throughout the Caribbean and South-east Asia); and reptile skins, used for shoes, handbags, belts and watch straps. Further details are given in the World Wildlife Fund's free leaflet, Buyer Beware (01483 426444).

o Import duty. Finally, do not forget the cost of getting your purchase home. As well as possible excess baggage costs if you are flying, you have to pay duty plus VAT on the full value of any item worth more than pounds 145 that you bring into the UK from a non-EU country. The rate of duty varies - a woollen, woven rug would be charged at 8.4 per cent, for example, but silver jewellery at just 2.9 per cent. VAT is also payable on gold and gold coins. There is a Customs Information Line on 0181-910 3744/ 3766 and a free leaflet, A Guide for Travellers, is available from 0171- 202 4227.

Jean Eaglesham works for 'Investors Chronicle'.

Sound investments or souvenirs?

Champagne from France: There is no point buying in France rather than the UK. "There's a certain build-up of demand ahead of the millennium, but it's only worthwhile looking right at the top end of the market," says Serena Sutcliffe from Sotheby's.

Wine from France, Italy and Spain: No point buying abroad. "Buy the best and buy young," says Paul Bowker from Christies.

Jewellery from Far East and Asia: "Enjoyment, not profit, must be the main reason for buying. Gemstones may not be what they purport to be," says Jan Havlik from Spink & Son.

Rugs and carpets from Turkey, China and India: "Only around 10 per cent are cheaper abroad," says Arto Keshishian of Keshishian.

Arts and antiques: "If you're interested in antiques, go to a market, haggle and enjoy yourself. But if you're investing a lot, remember you don't have the same legal protection as in the UK," says Malcolm Hord from London & Provincial Antique Dealers Association.