by Dr Pandula Siribaddana

Created on: December 16, 2011   Last Updated: December 18, 2011

For some investors, spending or more correctly speaking, investing in antiques has become a big business. However, the number of persons successfully negotiating the ‘rough’ and ‘turbulent’ seas of ‘antique market’ seems to be a handful. According to experts, although it’s an attractive and interesting area of investment, it is also considered ‘

high risk’ investment particularly because of the speculative nature of valuing a particular antique.

Investing in antiques require a wealth of knowledge on the part of the investor in relation to the objects origin, authenticity, quality, and investor acceptability. Furthermore, certain antiques require special caring once purchased, and if not, the item may degrade and will be a lost for the investor. For this reason, a person who is expecting to invest in antiques need to build up his or her knowledge through reading, inquiry and intelligence before making such a huge investment.

Another risk associated with investing in antiques is the potential for forgery through counterfeit items. Thus, the knowledge gained should help with this regard to a certain extent although the investors need to put certain amount of faith on the dealers themselves for their certification.

However, one should not rely on the dealer's certification only as it may be a risky thing to do. Many counterfeit antiques are available in the market and even the experts could not recognize these fake items just by looking.

The whole fiasco of failed investments on antiques could take place if the public taste or trends of acceptance for a certain piece of antique is not recognized properly. For instance, investors might not want to invest in an item which no longer is accepted as the ‘trend’ in antique business. This would mean that, the investor of the same might be stuck with the item or else will have to sell it for a very low price than the original purchase price.

Another important risk factor related to antiques as mentioned earlier is its degradability, unless its quality remains high and proper maintenance is carried out. This needs expertise and instructions from the dealer on how to care for the item. Unless done, poor handling and caring may lead to item breakage or degradation which can incur a substantial loss on the investor. In this regard, one should also opt to choose reputed dealers as they can minimize this risk enormously.

At the same time, an antique investor needs to invest large sums of money in order to purchase some items and in certain instances; this can run into many millions. However, in order to minimize the risk, one should work according to a budget and avoid putting money on just one item but spread the risk to several items purchased in several different categories of antiques.

The unpredictable nature of investing in antiques therefore, makes it a high risk investment although in certain instances. However, the resulting profit can far outweigh the potential risk for the knowledgeable, and for the intelligent investor.

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