Alternative Assets: Antiques

One common form of alternative investing is antiquing. Although often considered a hobby, antiques have the potential to offer quite large returns on investments. There is no hard and fast definition of antiques, although they are generally considered to be any item that is old and has some sort of value because it is rare and represents some past era in history. Common examples of antiques include sewing machines, clocks, furniture, or books. These objects, in their early days, were most likely common household objects that served functional purposes for the people that owned them. However, as they grew older, their value was no longer in their utility, but rather in their age.

Not all “old” objects are considered valuable. In order for an antique to be a profitable alternative asset, it needs to first be in good condition. How well an object has been preserved can make a huge difference in its value as an investment. An old clock, for example, will be considerably more valuable if it still works just as old furniture will be more lucrative if all of the original material is still intact. The rarity of an object can also greatly impact its value. If a sewing machine is one of the last of its model in existence, its worth will exceed that of a more common version. Antiques which display some level of craftsmanship are also quality investments. Handcrafted items, such as a desk with hand-carved details, are in much higher demand in the antique market.

The goal of many antiques dealers is to buy items that they think will greatly increase in value. Just as with many other investment approaches, antiques investors typically try to “buy low and sell high.” Similar to the stock market, this strategy typically yields the highest returns. One method that antiques investors use to find well-priced antiques, is to look through garage sales. The thought here is that many people do not realize the value of their old or out-dated items and sell them for extremely low prices. With a little elbow-grease, many of these items can be transformed into high-quality alternative assets. As explained earlier, this doesn’t mean that any old item found in a garage sale will be valuable. In fact, there will most likely be only a few potential buys hidden among a lot of junk. But by becoming educated about the antiques market and what is in demand, it is possible to find some real treasures.

Another avenue for obtaining antiques is through an auction house. While items here will be considerably more expensive than at a garage sale, one can be assured of their value. Professional antiques dealers canvas the country looking to buy valuable antiques and sell them in their auction houses. Obtaining alternative assets in this manner can be likened to purchasing expensive, but high rated stocks in the market such as Google.