The fine art of making money

Paul Slade asks three experts to come up with tangible alternative investments
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A unit trust may give you a satisfactory investment return but it can never provide the kind of pleasure offered by a painting on the wall of your home or a piece of antique craftsmanship.

The beauty of such an investment is that you own an asset that you can touch, use and derive pleasure from every day. And if you buy wisely, the returns can be very attractive, too.

We asked three experts to spend a notional pounds 10,000 on fine wines, art or antiques with the intention of maximising the value of their investment in one year's time.

It should be emphasised, however, that one year is really too short a timescale to be thinking of putting money into such alternative investments. Dealers' and auctioneers' mark-ups mean that you will have to see hefty price rises before you can actually sell at a profit.

You should also only invest a small proportion of your savings, and certainly not any rainy day money that you may need back quickly.

Wine

Alan Rayne, chairman of Magnum Fine Wines in London SW1, split his pounds 10,000 among six bottles of wine. His selection is:

1 bottle Chateau Mouton-Rothschild, 1982 pounds 2,900 (1st Cru Classe Pauillac)

1 bottle Chateau Leoville-La-Cases, 1986 pounds 600 (2nd Cru Classe St Julien)

1 bottle Chateau Pichon-Longueville-Lalande, 1986 pounds 500 (2nd Cru Classe Pauillac)

1 bottle Chateau Haut-Brion, 1989 pounds 1,250 (1st Cru Classe Graves)

1 bottle Chateau Mouton-Rothschild, 1990 pounds 850 (1st Cru Classe Pauillac)

1 bottle Chateau Petrus, 1990 pounds 3,900 (Pomerol)

The prices are those at which Mr Rayne would sell the wines to customers. They are based on the assumption that the wines themselves would be kept in a Customs-controlled bonded warehouse, thus avoiding the need to pay duty. Storing the wines in this way also means they can be kept in the optimum environmental conditions

Mr Rayne says: "We only trade the very best wines out of Bordeaux - what I call the blue chips. Within the blue chips there are always one or two exceptional wines, and in any portfolio those are the wines we include."

Magnum customers receive regular updates on the value of their wines plus regular advice on what might be the best time or place to sell. "You don't have to be a wine expert to invest in wine any more than you have to be very knowledgeable about shares to buy them," Mr Rayne says. "You just rely on somebody else being an expert in their field."

Art

Christopher Wood, who runs the picture department at London's Mallett Gallery, opted for a selection of 19th-century English drawings:

Figure Study by J D Watson pounds 200

Figure Study by E J Poynter pounds 600

Study of a Woman by Joseph Southall pounds 1,000

Portrait of a Child by G E Hicks pounds 1,200

Music (Study for a Mural) by Lord Leighton pounds 2,500

Leopard by Arthur Wardle pounds 4,500

Mr Wood says: "I think all of these drawings are interesting and worth buying and are by artists who are not, at the moment, at the top end of the range. That is except Lord Leighton who, with a major exhibition at the Royal Academy, is a very valuable and expensive artist. Nineteenth- century drawings are still generally reasonable [in price]."

Mr Wood says he has drawings by all these artists except Arthur Wardle in his own collection.

He adds that he expects the drawings to show a fairly modest return over the next year but cautions that predicting performance in the art world is not a simple matter. "Any art object has to be looked at as a medium to long-term investment," he says. "What might happen is that there's a high price paid in the sale room for one of those artists that would bring up the value of his drawings a year from now."

Antiques

Robert Pugh, an antiques dealer in Bath, has picked two items that he has recently seen sold for the prices given.

A mahogany bedroom wardrobe,or press, circa 1820 pounds 7,000

A very large Keelings or Burslem "Losol Ware" ironstone dinner service for 12, circa 1910 pounds 2,750

Mr Pugh says of the bedroom press: "I believe interior designers will continue to take an interest in bedrooms and will continue to move away from fitted furniture. The size of the piece gives plenty of space but allows for use in almost any bedroom."

Of the dinner service he says: "Large dinner services for use have been increasing in value steadily over the last few years. This somewhat late service has the advantage of being colourful, and it remains possible to add pieces to it. Earlier services have increased in value so much that this one is sure to appreciate over the next 12 months."

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