InvEStInG
Americana , like other collectible markets , is driven by sellers , not buyers or the economy , particularly at the high end , says Hays . “ There is a very small supply of masterpieces and rare portraits in this field . So whether sellers are encouraged to put up [ for sale ] great things is important . It ’ s a pipeline driven market .”
Paths In
The players in the marketplace , both buyers and sellers , face advantages and challenges , and it ’ s important for advisors to outline these to their clients .
Auction houses let collectors bid in person at the events , by phone or online . In theory , an auction reveals an item ’ s true market value . The hammer price ( or winning bid ) shows the actual amount a buyer is willing to pay a willing seller .
But a problem for the buyer is not knowing the price up front . A case in point is the John Wilkes Booth reward poster that Dallas-based Heritage Auctions sold last year . “ It was in great condition , two or three bidders really wanted it , and it set a world record . We got $ 275,000 for it . Normally these sell in the $ 60,000 to $ 80,000 range ,” reports Curtis Lindner , director of the Americana Department at Heritage Auctions .
The winning bidder typically pays a buyer ’ s premium . It can top 20 % for a mid-seven-figure object and come closer to 25 % at lower prices . Sellers pay a commission that may be reduced or waived when offering an exceptional artifact .
Some wealthy collectors like to bid themselves for the thrill . Others engage an agent to bid for them , Lindner explains . Agents assess the desirability of available items , strategize with the collectors about how much to bid , then represent the collectors for a negotiated fee at the auction .
The other major players in this market are the dealers . Some serve as agents , but generally dealers buy pieces for their own inventory , then resell them . A dealer often works closely with collectors — especially ones seeking pricier objects — learning their interests and perhaps helping them form a vision for their collections . Then the dealers hunt the want lists .
“ The legwork on the collector ’ s end is usually minimal with a dealer , and the experience is tailored to the collector ’ s needs ,” says Rau . “ You decide what you like and let the dealer do the hard work of locating the perfect piece .”
The drawback is not knowing the dealer ’ s markup , which is often viewed
“ Collecting art can be daunting . Even very successful people feel there ’ s a great knowledge base that they ’ re not privy to . ... One of the wonderful things about any collection is that you can upgrade it or change the scope .”
— Erik Gronning , Sotheby ’ s
as an amount above the market value . In some cases it might not be much more than the buyer ’ s premium at an auction house . And in any case , paying up may be worth it to a busy client to land something very special .
Is It Real ?
No matter which avenue a collector takes , watching for fraud is essential . The Americana world is rife with fakes and forgeries . “ If you stumble across a price that is too good to be true on eBay , it is almost certainly not legitimate ,” says Rau , who advises buying only from reputable auction houses and dealers .
Technology abets fakery . Heritage Auctions ’ Lindner says , “ People are using high-quality printers to make rare Abraham Lincoln campaign ribbon , putting them on silk , and it ’ s very hard to detect if it ’ s an original or not .”
Collectors should also be careful with autographs . It ’ s a common practice , says Lindner , for presidents ’ signatures to be made by their secretaries or by an autopen ( a machine many politicians and celebrities use ). These aren ’ t exactly forgeries . But they ’ re not the real thing , either .
First Actions
If Americana becomes hot and collectors think of selling their treasures , they ’ ll need help valuing what they have and will want to turn to appraisers . When they have some idea of the value of their collectibles , Rau says they should “ reach out to auction houses and dealers after discovering which excel most in your specific market of Americana . It is well worth shopping around .”
Clients inspired to begin a collection of their own may wonder how to start . “ Collecting art can be daunting ,” says Erik Gronning , senior vice president and head of the Americana Department at Sotheby ’ s , in New York . “ Even very successful people feel there ’ s a great knowledge base that they ’ re not privy to .
“ It ’ s OK to start small ,” he adds . “ One of the wonderful things about any collection is that you can upgrade it or change the scope .”
Rather than collecting solely for investment , he urges people “ to collect what they like . It will be a much more fulfilling experience . There ’ s nothing better than to sit in your living room when your friends come over and talk about a fabulous duck decoy that you have on the wall , or a table handcrafted out of walnut in 1730 in Philadelphia .”
Lindner advises buying specimens in the best condition affordable . They ’ ll be easier to sell later and hold value better than autographs with light ink or photographs with tears or stains .
Given today ’ s divided culture , cynics may argue that the enthusiasm about the country ’ s 250th birthday , and hence for American artifacts , won ’ t develop . Gronning doesn ’ t buy that . Because the genre encompasses so many categories , he says , “ there ’ s something for everybody under the umbrella of Americana .”
46 | financial advisor magazine | september 2022 www . fa-mag . com