May - more on investing in art - gains and losses

Investing in Miniatures
Since I wrote the previous post at  View  commenting upon the market place, I have been asked the following questions;

1 When you write about the investment prospects for miniatures is it across the board or just for certain eras and genre? More for the Georgian miniatures? For both British and American miniatures?

2 What are the appreciation prospects for American, German (Dresden Porcelain) and French Revival miniatures? The American would be on ivory and ceramics (porcelain and milk glass). The Dresden porcelain miniatures I refer to are the photographic portrait types. French would be on ivory and enameled copper.

I replied;

I was primarily thinking about American miniatures, rather than British or European.  Per head of population, USA miniatures in USA are far, far, rarer than British/European are in Britain/Europe.  Think about where the population and wealth was in 1770-1820, not in USA, and the USA was disrupted by wars during that time, and again in the 1860's, so even less were painted there.

However, it is also fair to say there is more understanding of miniatures by mature art collectors in Britain and Europe.  They are a limited resource; as no more 19C-20C miniatures will be painted!

Someone said  "it is hard to make predictions, especially with respect to the future ".  But I think attractive miniatures, by known American artists, in good condition, bought carefully at sensible prices should continue to appreciate and have little downside risk.  In addition, I feel there is far more pleasure than looking at share or gold certificates!!  A modern art painting can cost say $1m, but with a risk of then going out of fashion. In comparison, for the same money one could, (if you can find them!!) theoretically buy a portfolio of 1000 miniatures at $1000 each. Which would you rather have as an investment?

Americans are rightly interested in their art and social history. As I say there are not many quality American miniatures from 1790-1920, and they are gradually ending up in museums and historical societies, and so become unavailable for the private collector. I think ignorance of their actual existence is a factor holding them back, so they are overlooked. Look what prices are obtained for political, film, and sports historical items etc. 

Few Americans understand them, so there is a buying advantage for those who study the subject and the artists now. But as "ordinary people" see miniatures on the Antiques Roadshow and elsewhere, knowledge of their existence should spread and so increase demand.  But who really knows!

Some examples of quality American miniatures are shown in an article at Philadelphia Portrait Miniatures 1760-1860 by Carol Eaton Soltis … These examples are in museums, but do give an idea of the type I was meaning. In particular, early miniatures with identified sitters will attract a premium. A good example of this was a sale on eBay this week.  

This miniature of Abbott Lawrence is by the miniature painter George Lethbridge Saunders (1807 - 1863) who was English and worked in South Carolina, painting important dignitaries including Jefferson Davis. The portrait is of Abbott Lawrence who was a prominent American businessman, politician and philanthropist. He founded Lawrence, Massachusetts and the Lawrence Scientific School at Harvard. I think if the sitter had been unidentified and known as painted by Saunders, the miniature would have sold for $800-$1200, but due to being such an important sitter the final price was $4,810.

Of course, the potential for investment returns is determined by how well the investment was bought! Obviously, quality bought cheaply, will appreciate more than the same quality bought expensively! As with buying any antique or artwork, it is important to remember that miniatures sold by reputable dealers will be fully priced, to reflect their selling guarantees and their work and research in locating the miniatures they offer for sale.

Hence, if one wishes to consider miniature portraits as an investment aimed at maximising one's investment return, rather than as purely a decorative object d'art the subject must be researched and knowledge built up by a collector. This will give a collector/investor the knowledge and courage to buy direct at public auctions. Similarly, if one is investing instead of collecting, the costs of resale need to be considered, so a significant increase in value, perhaps 30%, will be needed just to cover potential costs of resale. A recent eBay purchase for this collection involved limited knowledge, and more courage, which is hoped will be justified.

The miniature was described as by John Vanderlyn, who was an American artist, but it does not look American in style, so collectors and potential buyers of American miniatures were discouraged. However, the name of the sitter is on the reverse. The writing was hard to read, but it was eventually possible to read that she is Mrs John Sanders van Rensselaer, formerly Ann Dunkin, a wealthy Philadelphia beauty, who was married on 12 March 1816 in Philadelphia.

The van Rensselaers were an important New York family and so Ann was related by marriage to Mrs Stephen van Rensselaer III, of whom there are two miniatures in the Metropolitan collection of miniatures, one by Robert Fulton and one by Nathaniel Rogers.

Ann's grandmother, Mrs Ann Dunkin, together with her grandson, i.e. Ann's first child, were painted by Thomas Sully, so the family was accustomed to commissioning paintings. While the attribution to John Vanderlyn still needs more research, it is looking increasingly likely as he trained in France before returning to America in 1815 and if confirmed, the purchase price of $750 will represent a substantial discount on the real value.

The above comments more address American miniature portraits, but they are also relevant to collectors in Britain and Europe who wish to study and research the subject, and then buy at public auction. For example, although they are not American, two recent purchases for this collection were miniatures by Domenico Bossi and Nicholas Freese, both described at auction as by unknown artists. Their combined cost was about $750, but by determining the artists, the market value of the two is now probably around ten times their cost.

It has been mentioned before that a major aim with this Artists and Ancestors Collection is to have fun while collecting, and by making the limited funding available go a long way. Thus, rather than purchasing fully priced miniatures, part of that the objective has been to have an average purchase cost of under $500 per miniature. 

The three examples appearing here were purchased in the space of two months and cost $1500 in total, so their average cost was $500. They are worth much more than that, so they show illustrate that bargains can still be found. Obviously, that does not happen every day (more's the pity!), but it does show that, as with any investment decision, buying well is the result of study and research, and having the courage to back one's judgement and knowledge against other bidders. 

That does not mean that mistakes can be completely avoided. I still make them and 10%-15% of the miniatures still displayed as part of this collection are readily admittedly as my mistakes!! - They will need to be sold over time, but the aim is for successes to outweigh mistakes. And the cost of a mistake, once realized and mitigated via a subsequent resale, is usually recouped by improved decision making in the future.

Falling Values

As an extra comment, I also notice Kovell's reporting other evidence of rising prices at Prices Go High and Low Their comment there about low prices is also interesting, as it tends to illustrate another point I made, that some modern art items can go out of fashion. They report on a picture sold for $16,800 in 2005, which has just resold for $1,673. 

I also note the following reference at  http://www.theage.com.au/victoria/rare-portraits-of-tasmanian-aborigines-up-for-sale-20110515-1eoah.html#ixzz1MSJuq8Jj 

Also being auctioned at Sotheby's tomorrow is Australian impressionist John Russell's The Artist's Children on the Beach, estimated at just $400,000 to $600,000 - a far cry from the $1.8 million (including commissions) it sold for at auction in 2007 during the market boom. The painting was then bought by Melbourne property developers Max Moar and Iris Lustig, who are believed to be selling it tomorrow night.