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Last Updated: Friday, 28 May, 2004, 16:02 GMT 17:02 UK
Sitting on a fortune?
The antique business is growing

Fed up with the vagaries of the stock market and the poor returns from low interest savings accounts?

Alternative investments have always been a popular option, whether it's wine, art or collectibles.

Of course, it's harder to find the range of advice on financial matters you get in the newspapers and on programmes such as Working Lunch.

So you need to do plenty of homework before splashing out your hard-earned cash on that up-and-coming painter or a rolltop desk of unknown origins.

Rules

One of the most popular areas is antique furniture, no doubt boosted by the spate of TV programmes all seeming to feature the perma-tanned David Dickinson.

Dealers claim that furniture has outperformed the markets and house price inflation over the past 30 years.

There are some basic rules that apply to any alternative investment.

Firstly, buy something because you like it. It's no good having an ugly object sitting in your living room simply because you hope it will shoot up in value.

Be focused - buying random pieces of art or furniture is fine, but a collection of sculpture or Art Deco may ultimately be more valuable.

Investment

It's often better to choose an investment that already has a following - there will be more buyers when you come to sell.

"As with any other investment, it is essential to buy the right thing at the right price," advises Simon Bowyer, director of Yorkshire-based antiques group Tomlinsons.

"Pay too much for an item and you will have to wait many years for inflation to catch up with your error."

Finally, these investments aren't like day trading where you can dip in and out of the markets.

Be prepared to invest for the long term, so don't tie up cash you might need in a hurry.

Specialists

So what do you look for in antique furniture?

Pieces from the late 17th and early 18th centuries are big at the moment.

If it's marked or labelled with a name you've heard of - Ince & Mayhew, Seddon or Gillows are examples - it's probably worth a fair bit.

But Art Deco from the early 20th century and even pieces from the 1960s are worth collecting.

Georgian English furniture has always been considered a good long-term investment. Some observers think this market has been depressed recently so it could be a good time to get into it.
Top Tips
Compare prices across a number of outlets and be prepared to negotiate.
Always buy from a reputable dealer who is a member of a professional body.
Buy the best quality you can afford.
Insist on a full written description of the goods you are buying, with details of dates and originality.
When buying watches or clocks always ask for a guarantee.
Go for something that is functional as well as attractive. It will hold its value.

Other specialists say Art Nouveau and Arts & Crafts are good investments at the moment.

English oak and country furniture is also seen as undervalued.

You can buy either from dealers or at auction - but whatever you do, check prices regularly so you can tell what's a good deal and what isn't.

Dealers

Provenance can also be important. Is there any verification that it was made by someone well-known? Or does it have an interesting history?

Some dealers and investors think it's sensible to buy only the best, as a top quality piece will rise more in value than a poor example.

If you want a helping hand, there are dealers who will buy, hold and sell pieces on behalf of clients, taking much of the stress out of running a portfolio.

While Tomlinsons deals mainly with the trade, six years ago, it started a Fine Furniture Club, where the public get to visit at weekends and buy stock.

This part of the business has grown rapidly, with sales up more than 30%. Membership is now about 11,000.

Simon Bowyer says that when you buy an antique you're also paying for the quality of the piece.

"You can buy two antique chairs for 750 which are 150 years old and, if looked after, will last another 100 years," he says.

"Having them made today could cost about 2,000 each. With antiques, you're benefiting from the cheap labour of the 17th century."



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