Art and collectables are in, writes David Ciampa.

ACQUIRING art was once only for the elite but more and more people are buying fine arts and collectables as a way to boost their investment portfolio.

Trustees of self-managed superannuation funds are increasingly looking to the asset class and even some larger superannuation funds are known to invest in the fine arts.

Dealer Jon Dwyer, of Dwyer Fine Arts, has noticed an increase in "DIY" super clients which now make up about 40 per cent of his clientele.

But it's not just the older investors who are being seen bidding on art and collectables, the effects of a booming economy have meant there's more cash around. "It's not uncommon to see a tradesman take away a Brett Whiteley in the back of his ute," Dwyer says.

What's given more fuel to this pattern has been the slump in equity markets over the past year, prompting some people to hide some of their money from the bear market in alternative investments.

MARKET MOVERS

The value of these types of assets can be hard to predict and monitor because of the level of subjectivity. It comes down to what value someone else is prepared to pay for something at a particular time. However, professional valuers and auction houses can give you an estimated market value.

There are peaks and troughs in the art market. For instance, Dwyer says that after an artist dies, a work can appreciate "about 25-30per cent" in the first six to 12 months and after about 18 months prices tend to retreat and plateau for two to three years.

Despite this, he doesn't advocate buying and selling in the short term, he simply points out that "the longer you hold, the greater the gain". What price you get exactly is hard to tell. Dwyer says it may be difficult to predict where prices will go in the future for art, but over three to five years should see good returns.

NEW COLLECTORS

There is a growing breed of collectors getting into collectables such as sports memorabilia for the first time at 45-55 years of age. They have either emptied the nest or have paid off the mortgage and are in their "peak earning years". Auctioneer Charles Leski says: "They want to revive a passion they may have had as a child but didn't have the means."

The common entry range for these new collectors is $5000 to $50,000 because they are amounts that can be made out by cheque or put on a credit card.

One such investor is Sydney collector Peter Sheridan, who 10 years ago was reminded of his love of Bakelite radios after seeing one in a London vintage store. This started an obsession that has led to him amassing quite a collection of art deco Bakelite radios. Sheridan contributed four of these - each with a value of $20,000 - to the Art Deco (1930-1955) exhibition now on at the National Gallery of Victoria.

But not everything old is valuable. With collectables, the No.1 key to value is the rarity. Sheridan says 95 per cent of Bakelite radios made were brown and sell for about $20 these days. It's the much-harder-to-find coloured radios that are valuable.

Some of the oldest firearms and muskets that Roland Martin sells at his shop, Australian Arms Auctions based in Melbourne, stretch back to the 1600s but they may not be as valuable as a more recent sword like a rapier or cutlass from the 1800s.

He says collectors should expect to receive a 10 per cent increase in value on their items per year over the long term and budding profit-makers should look to hold items for at least five years.

THINGS TO KNOW

* Do your research.

* Value will be determined by rarity, maker and condition.

* Auction house fees are up to 15 per cent over the hammer price.

* Items that have overseas appeal have a better chance of increasing in value.

* Be wary of fakes.

* For most firearms you will need a licence.