5 Ways to Invest in Art and Collectibles

The world of Wall Street, so expert at turning logic on its head, even boasts the capability of inverting the age-old question, “But is it art?” This is because viewed through the lens of the skeptical investor, the query becomes: “But is art it?”

In some cases, it’s nothing but a sinking proposition. “Please stop purchasing art in cruise ship galleries as investments,” says Maggie Lopez, a fine art consultant and appraiser with Zeitgeist ARTifacts in Atlanta. “You can’t do any meaningful research while on board and on vacation — and honeymoon mentality hinders sensible decision-making.”

If it helps, imagine Jack Jones singing, “The Love Boat soon will be making another run … for your wallet.”

Of course, promising prospects fill the investment landscape — even if art-based investments such as photographs and vintage musical instruments don’t slot into portfolios in traditional ways. But for many, the question boils down to the joy of collecting and savoring the item in question. That is: A framed stock certificate can’t hold a candle to framed fine art (the non-cruise ship kind). And you certainly can’t crank it up the way you would a 1959 Gibson Les Paul (a guitar that’s sold for as much as $750,000).

Still, items from the arts carry a huge risk; vintage guitar values, for example, dropped by more than 30 percent after the onset of the Great Recession. “The general sense is that we’re in something of a recovery and have been for the past year or two, though sales on most key models still haven’t achieved prices from the peak of the market in 2008,” says Dan Orkin, content director at Reverb.com, a musical instrument sales site. Think of a stock that’s evened out, perhaps to rise again, “but not surging upward with any real velocity.”

Here’s how some categories in the arts sphere break down for investment potential, with experts weighing in on what to look for and avoid:

The fine art of fine art investing. New York City-based financial advisor Dave Madee has emerging and established artists as clients, so he knows both sides of the picture, so to speak. Pay attention to the art critics to find up-and-comers, and make sure you have contacts in the business willing to help. “The golden word of successful art investing, whether small or large, is relationships,” he says.

Now for the legwork, he says: “Get good walking shoes, visit galleries and art fairs like Frieze in New York, talk with owners and meet the artists whose work you like.” Adds Lopez: “The thriving impressionist, modern, postwar and contemporary art markets show no signs of slowing down anytime soon.” And just this month, Sotheby’s sold every piece in its Impressionist & Modern Art Day Sale, “which featured 126 Picasso ceramics belonging to the artist’s granddaughter.” The take? A stunning $48.8 million.

Photos: Focus on the ladies. “The market for photographic artworks by women artists is an area that’s gaining more and more traction,” says Daile Kaplan, vice president and director of photographs for Swann Galleries, based in New York. That’s especially true in an era when YouTube and the Internet have usurped some of the importance of the still picture. “In a virtual world, where images are ephemeral, the notion that collectors can live with a photographic print that is signed and created by a particular photographer is very desirable,” Kaplan says.

But take care not to buy prints without a pedigree. “Even though a photograph may look finished and is displayed in a beautiful frame, it may not be authorized by the artist,” Kaplan says. “It’s important to know that an artist’s body of work has been sufficiently vetted or controlled — even after their death.”

Lithographs and such: Printing money slowly. With the advent of live streaming auctions, millennials have gotten into the collecting-investing act, though they generally don’t have tons of dough to throw down. Here’s the good news: “There are always good investments for value-minded buyers in the editions market — that is, for artist lithographs, etchings and silk screens,” says Todd Weyman, Swann’s vice president and director of prints and drawings. “There’s a broad group of collectors in this market, and it’s frequently the entry point for many collectors into the greater fine art market, so it has one of largest pools of enthusiastic buyers and sellers.” That said, “As always, avoid the trends in any of these markets, where there is likely to be very little upswing,” Weyman says.

Guitars: Strum and drag. The 1999 sale of Eric Clapton’s 1956 Fender Stratocaster for $450,000 set the vintage market on fire. And while the heady days of the market haven’t come back, returns of 50 percent or more are common via flipping. “If you spot a good deal on a guitar listed at $500, make an offer and get it for $400, and then turn around and sell it next week for $600. That’s a better return on investment than waiting around for a few years to see if the going price increases at all,” Orkin says. Classic models from Fender, Gibson and Martin are usually good bets, but returns may not be entirely worthwhile in the long term if viewed strictly as an investment vehicle.

Comics: Holy dinero! These are definitely worth digging in the attic to find. In 2011, actor Nicholas Cage sold a near-mint copy of Action Comics No. 1 at a record $2.16 million. That was far more than the $150,000 or so he paid for it in 1997. That 1938 comic features Superman’s first appearance, and a copy was purchased in 2014 for an astounding $3.2 million by Metropolis Comics in New York. The original price? Ten cents, making for a 32 million percent return. Not even Apple (APPL) will ever match that.

Comic art is also on the rise; Metropolis recently sold an illustration of Frank Miller’s “Dark Knight & Robin” for $175,000. “Blue-chip heroes like Spider-Man, Captain America, Iron Man, Batman, Superman and Wonder Woman are always in demand,” says Vincent Zurzolo, chief operating officer of the Metropolis Comics and ComicConnect websites, and curator of the Metropolis Gallery. “Low bank interest rates and volatility in the stock market make tangible investments like comic books an ideal place for people to make money with their money. Plus, it’s a lot of fun.”

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