The Three Categories of Antiques
inMarch 22, 2012 - 6:14am
Most antiques fall into one of three categories: investment, collectable, and decorative. Right now, you are probably running over in your mind those things you think of as antiques and wondering into which of these categories they fall. No doubt, you have already thought of several items that fall into more than one. Tiffany lamps are investments, they are decorative, and some people collect them. What I hope to demonstrate is that each one of these categories carries specific conditions and that the buyer places an object into a category by virtue of their approach and expectations.
This is the first article in which I will explore these three categories.
Most antique dealers will not regularly refer to these categories, but they do recognize them. Sometimes when an antique is of exceptional value, dealers will call it “important” or “museum quality.” I think of these terms as analogous to the term investment antique. Some dealers say “collectable” when referring to things they think are too young to be antique. Age and antiques is a slippery thing. The hundred-year designation is not in the dictionary definition of antique. The hundred-year distinction is primarily customs law. Very few dealers will call something a “decorative antique,” although they understand the concept. I have coined this to categorize just about everything else.
The reason I am proposing these categories is that over the years I have encountered people who apply the standards of one category to another such as asking for the “provenance” of a common marble top table. The person who expects this does not know that what they are asking is inappropriate to the object and its intended use as a piece of furniture. This sort of confusion I hope to clarify in these articles.
The first category is “investment antiques.” Remember, in most cases the buyer decides which category an object falls into by virtue of their attitude and approach. An antique is an investment if that is what they expect or want it to be, although, like stocks, some antiques are good investments while others are just junk bonds.
People tend to think of all antiques as objects that go up in value over time. This is a charming notion vigorously supported by the business but is not true. Not all antiques go up in value as a matter of fact most do not. There are two reasons for this: the first is as the old saying goes, “You buy at retail and sell at wholesale,” and it can be a long time before the one catches up to the other. The second reason is that antiques go in and out of style just ask anyone who bought wicker in the eighties.
Generally, antiques will have a high trade-in value particularly when compared to say, Ikea. Assuming that many antique dealers work on a “keystone” that is, selling for twice what they pay, a year later you should be able to sell your $100 desk back to the dealer for around $50. Resell your Ikea desk in a year and, provided the drawers still work, you will be lucky to get $10 for it at your yard sale.
A fifty-percent depreciation is not bad and certainly better than most new things, but this is not the definition of an investment. The brokerage house that has the motto, “We will lose you less money than the other guy,” carved in granite above the door will very quickly be looking for a sublet on their lease. An investment should make money over time and preferably at a rate greater than inflation or Contra fund. Some antiques will perform this well but as with stocks you need to look at the record to identify them. In this case, it is the auction record. All large auction houses have records that go back a many years and you can see which objects consistently go up in price. A few examples are Tiffany lamps, Lafarge windows, Chippendale furniture, Civil War objects, and early baseball cards (stress early, modern ones are fake investments).
Objects of significant historic importance can often be good investments as history will always be there. Concerning historic objects provenance is very important. Provenance is a record of were something came from, and the chain of ownership. Often historic objects relate to certain persons or organizations, and how the objects came to where they are now is important for authenticity. Anything of great value attracts people interested in creating fakes. When I bought Sigmund Freud’s diary out of an antique shop in Jersey City the dealer would only give me the sketchiest of explanations of how he came by it and refused to put anything in writing.
This reminds me of a comedy bit by Father Guido Carducci who on his first trip to the Holy City of Jerusalem went into an antique shop and had an opportunity to buy the menu from the Last Supper, which he could not afford, and instead bought the check from the Last Brunch.
Investment antiques are often items that were expensive when they were new or contain precious materials like sterling or gold. One of the advantages of things made from precious materials is that they will always have scrap value even if the object goes out of favor. During the sterling run up in the eighties, the scrap value of sterling far exceeded the value of some objects and dealers melted down many nice old things. That was a unique event and not typical of the precious metals market. That said, however, as I write this we are experiencing a recession and gold is the highest it has ever been in history as gold is where people often put their money when the economy is uncertain.
The best investments will be the fine, rare, and pristine. Let me look for a moment at the word “pristine.” Not all investments are equal and like a mutual fund, you do not want any dogs in the portfolio and conversely you do not want anything to be wrong with your antique that might downgrade the value. Therefore, you want the object to be as close to original condition as possible, unaltered, and with no repairs. You must train yourself to be observant, know what the original appearance of the item should be, and look it over carefully. It is common to see magnifying glasses and black lights (these can expose hidden cracks or repairs) at auction previews. Even with objects that rarely turn up in pristine condition such as early baseball cards, the ones in the best condition will always be the most valuable.
To summarize, investment antiques are antiques bought with an eye towards increased value over time, to track this value you look at auction records, and the object must be as close to mint original condition as possible. However, most investment antiques are like those hedge funds with minimum million dollar entry-level investments and are out of the range of the average person so in my next article I will move on to the category, collectibles.
Written by Christopher Osborne
My Ruby Lane shop City Lights