Investing in Wine, Art, Collectibles

May 14th, 2008  |  Published in Investing

I always thought of investing in collectibles such as wine, scotch, or art, as something the fantastically wealthy did as they played polo on their front lawn and retired to their private libraries to smoke their fancy cigars. That got me thinking for a moment and wondering if investing in collectibles is something that the general public should start doing… then I came to my senses.

You Don’t Understand It

You should not invest in art because you probably don’t understand it. I studied art history for one year in high school and the only thing I learned as that you had to be the first to do something. You had to be the first to use cubes to represent people (Picasso) if you wanted to be famous. You had to be the first to repeat images and make them crazy colors (Warhol) if you wanted to be famous. You had to be the first to draw vertical and horizontal lines and start coloring them in with primary colors (Mondrian) if you wanted to be famous. Are you seeing a trend? You have to be first and lucky and even then there was no certainty for the artist him or herself! So you want to invest in it? If you don’t understand it, you can’t possible make money in it.

Probably Too Expensive & Limited Demand

Do you really want to put a few thousand (or even a few hundred) on a collectible with a limited demand? The stock market is hard enough and there are millions of people at any moment willing to buy your stock from you. The collectible market is even less fluid and so you run the risk of never finding a buyer for your great artistic find.

They Do It For Fun

When the fantastically wealthy invest in art or scotch or wine or whatever, it’s more for entertainment than it is as an investment. Regular people compare cars and the number of bedrooms and bathrooms in their homes, fantastically rich people talk about how they paid $5,000 for a bottle of this limited edition wine from some obscure place that no one else has.

Don’t invest in collectibles. 🙂

  

Comments are closed.