By James Arnold
BBC News Online business reporter
The art market is increasingly accessible - but making money isn't getting any easier, as BBC News Online explains in the fourth part of a series on fun investments.
The price tag's the best bit
There's nothing like the art market for bringing a glint of piggish excitement to an investor's eye.
The grimy old painting at your granny's could turn out to be a Constable; the gormless art student next door could be tomorrow's Damien Hurst.
Even aside from the treasure-trove dreams of popular imagination, there is solid money to be made in art, and an increasing number of small investors are starting to dabble.
Trouble is, only the savviest - or luckiest - can hope to make a penny out of it.
Ups and downs
If you believe what art dealers tell you, times are hard.
Galleries and auction houses are suffering, squeezed between reluctant buyers and competition from the internet.
But by most other measures, things are swinging.
Old masters, the cream on the top of the market, are moving briskly: last year saw a Rubens sold for £50m, the highest price since the historic boom of the early 1990s.
Further down, according to Hislops 2003 Price Guide, individual artists have chalked up price increases of up to 700% in 1997-2002.
According to Karl Schweizer, head of art banking at Swiss bank UBS, there may be some truth in the old rule that art booms when the stock market wobbles.
"At times like this, when markets are bad, people like to invest in something they can touch," he says.
Panting for paintings
Add the sort of glamour delivered by the stars of Britart, and it's little wonder that once-conservative investors are knocking on gallery doors.
When the Affordable Art Fair, the industry's biggest retail event, was launched five years ago, it attracted 10,000 visitors; this year, it expects 34,000 in total.
Erica Longley, a lawyer from Bedfordshire, began dabbling in art four years ago, using a five-figure redundancy pay-off.
Buying and - more rarely - selling judiciously, she reckons to have "more than doubled" her portfolio over that time.
"I was prepared to take a small loss, since I like having the stuff hanging on my wall," she says.
"The fact that I can make a tidy profit without trying too hard is a massive bonus."
Could do better
But the sad fact is that, for most punters, art is a pretty mundane investment.
In the long run, according the slightly tricky calculations needed in such an opaque market, average returns on art are no better than the stock market.
Could post-war design be the next big thing?
The Mei/Moses index, calculated by two economists from New York University, shows a long-term annual return of 8.2%, compared with 8.9% for the Dow Jones share index.
The British Rail pension fund, one of the few traditional investors to pioneer art market investment in the 1970s, bought cheap and sold off most of its assets at hefty profits in the late 1980s.
But even so, it failed to beat the stock market, and trustees bemoaned the fact that art - unlike, say, property - yields no regular income.
And while tracking the stock market is easy enough, managing an active art portfolio, one dealer says, "is only for those with a private income and plenty of leisure time".
Realistically, then, most average investors are likely to restrict themselves to contemporary art - where prices can be low and returns often spectacular - or the even more speculative "collectables" market.
Modern art is shrugging off its scary image, says Elizabeth Hodgson, curator of Beatrice Royal, a Hampshire gallery which aims to encourage the public into contemporary art.
"It's still the landscapes that most people go for, but it's surprising how people are starting to buy into glass, sculpture and all sorts of new things," she says.
Tricky as it is to generalise about such a diverse market, Ms Hodgson offers two golden rules for any would-be investor.
First, you may be no great expert, but buy only what makes an immediate impression on you.
Second, always get to know the artist, mainly to establish whether they are likely to produce a valuable future body of work.
This is relatively easily done: Ms Hodgson advises scouting at art-school shows, the best of which are now run on admirably commercial lines.
The murky world of antiques, by contrast, defies almost all attempts at generalisation.
Serious money is there to be made. Thanks to the unguessable enthusiasms of wealthy creators, eye-popping prices can sometimes be fetched by teddy bears, train sets or Crimean War medals.
Get to know the artist if you can
Investment advice differs according to whom you talk to.
Clive Stewart-Lockhart of Dreweatt Neate auctioneers makes a strong case for post-World War II European design - Arne Jacobsen furniture, for example, or Biba clothing and merchandise - as one of the few remaining rich and unmined seams.
But be warned: one buyer's collectable is another's tat - as increasing numbers of people decamp from family homes to smaller individual flats, huge quantities of bric-a-brac are being flogged off.
Stick to markets with loyal and established hordes of buyers: the postage stamp market, for example, is supported by 30 million buyers worldwide and a turnover of $10bn, according to Adrian Roose of stamp brokers Stanley Gibbons.
But above all, everyone says, don't put your shirt on the art market.
Your granny's grimy painting may be a Constable, but - let's face it - it probably isn't.
And barring a casino-style miracle, earning even a modest return is only possible with the sort of expertise, enthusiasm and commitment that few investors can spare.
"Frankly, if you're investing in art in order to make money, you're a fool," says one gallery owner.
"If you love a painting, then by all means buy it.
"But from an investment point of view, you'd be better off putting your money in lottery tickets."
The fifth part of the fun investing series will be published shortly.