Bona fide collectibles outperform the markets

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today's antiques.scott davisCollecting and investing in antiques and collectibles is an appealing hobby and wealth building strategy to many. When done properly, collectors get to enjoy their collections while building their investment portfolio.

Compared to the low interest rates available from banks today or the volatility and expenses of investing in stocks and bonds, well-chosen antiques and collectibles have almost always outperformed the financial markets. No wonder so many folks have tried their hand at some sort of collectible at one point or another.

To most, the field of antiques and collectibles is so vast and mysterious that they feel they cannot ever master it sufficiently to make wise investments. Still, having heard stories of fabulous returns on rather modest investments, they seek ways to participate. Unfortunately, unsavory manufacturers who see that demand will prey on the inexperience and vulnerability of novice investors by offering “instant collectibles” such as artworks, figurines, plates, commemorative coins and dolls.

Usually, those collectibles are said to be made in limited editions tied to the number the maker thinks he can sell, and their worth is supposedly validated by a certificate of authenticity such as a silly printed card of no legal merit. Why so many folks fall for such trickery is ponderous. Consumers would never think to want such a document when buying a blender or bunch of bananas.

The sad fact is that any item created for the express purpose of being instantly collectible is almost by definition not collectible. Things become collectible over time because of the laws of supply and demand. When supply is artificially manipulated by the producer of a collectible to equal demand, the investment potential is terrible for at least a generation and likely to only decrease.

The bottom line is that if you’ve bought such collectibles, chalk it up to a learning experience. The chances of any of those items being worth much are slim. Take the time to study any field that interests you and then find an antiques dealer whose advice you trust. Well-chosen “real” antiques and collectibles are still among your best and most rewarding investment options.

Scott Davis operates Rhode Island Antiques Mall, 345 Fountain St., Pawtucket. Contact him at (401) 475-3400 or Scott@riantiquesmall.com.

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