Home Insights & Advice The business of collecting: How do private collections determine value?

The business of collecting: How do private collections determine value?

by John Saunders
8th Jan 20 1:19 pm

Investing, no matter the market sector, is a fickle business. Prices can fluctuate wildly based on economic shifts, trends, demand, and more. When it comes to materials like art and fossils, though, collectors may have more influence on value than any other force. Based on what collectors choose to acquire, and how much they’re willing to pay, the art and fossil markets can shift dramatically. But while institutional collectors may have dominated the market for decades, private buyers are today’s power players.

Seeking stability

In order to understand why private collectors play such an important role in the price of art, fossils, and similar rarities, it’s necessary to understand how investors make decisions more broadly. While many collectors emphasize items they find beautiful or appealing, most are also making financial decisions; they want to invest in things that will provide lasting value. Historically, art is one of those markets. Recently, though, we’ve seen a shift away from art as a major investment, though, and it’s sent prices off-balance. Art prices are down, as are classic cars, while rare musical instruments saw major gains in 2016-2017.

Given that art prices are down – and they’ll keep falling without the support of the private market – investors are looking elsewhere for strong investment options. One place they’ve landed? Fossils and rare minerals. To successfully invest in this sector, though, investors need to understand what these materials are worth and how their financial engagement shapes the market.

To the bone

Art prices may fall when private investors step out of the market, but there’s still a general understanding of what paintings or drawings from prominent artists are worth. There’s also a recognition that there’s a fixed number of art pieces by any given creator. On the other hand, while there aren’t infinite fossils and minerals, there’s also not a fixed number. We regularly find more and redefine how we understand those materials. To put it simply, it’s a complicated market and prices may fluctuate both based on the number of investors and new archaeological and geological discoveries.

Given the frequent fluctuations, new fossil collectors should work with an investor who clearly understands the industry, and they are few and far between. However, as Peter Lovisek, CEO and investment advisor at Fossil Realm explains, only experienced consultants and dealers can help collectors access authentic specimens at below retail prices. They can also help investors access fossils that have a strong likelihood of increasing in value, even if private collectors step back from the market, as they have with art.

Many people are interested in collecting fossils because of their historical value. In addition, they also represent status symbols in society. When you’re interested in collecting fossils, you can find them through online sources, such as FossilEra.com and other fossil-selling platforms.

Shaping value, shaping history

Private investors certainly influence the value of collectibles, whether that’s art and fossils or rare fashion – another rapidly growing sector – but that’s not the only thing their acquisitiveness does. When collectors choose to acquire a piece of art or a fossil, they’re also shaping history. In fact, while some may deride private collectors’ actions as taking away from the public’s access to history, the reality is that private collections are vital to our cultural institutions. The famed Whitney Museum, for example, was founded specifically to house Gertrude Vanderbilt Whitney’s art collection, and the same is true of many other museums.

Not only do private collections often form the core of museums, but collectors are frequently wise art historians in their own rights. Collectors observe trends, can help bring new artists to the public’s attention, and, yes, help determine the value of both new and historic pieces. That affects the value of their own collections and that of others, but they’re just one group among many who play a major role in field, alongside the artists themselves, curators, corporate collectors, and art historians. The same can be said of private fossil and mineral collectors who exist within the larger ecosystem of corporate collectors, museums, geologists and paleontologists, biologists, and others.

Availability and ID events

Like any other collection, the availability of fossils also determines the value of the remaining ones for sale. It’s likened to collecting coins. The rare ones have the highest values, while the common ones have the least prices.

Identification or ID events can help you determine the value of fossils under your care if you don’t have any idea how much they’re worth. Paleontologists could help assess your specimen in this type of event. Yet you don’t have to wait for antique roadshows or ID events because natural history museums, universities, nature interpretive centers, and similar venues have enthusiastic staff members who could be willing to help you determine a fossil.

Identification events in places bring enthusiastic experts together, making identification more accessible for collectors who would otherwise keep their precious fossils in a drawer. But there are other options for those who don’t reside near a college or museum offering ID services. You can submit photos of your finds online for a staff paleontologist to check them, such as the University of Utah.

While we can’t ignore the role of private collectors in setting the price for art, fossils, fashion – anything that can be collected – we also shouldn’t overstate it to the point of alienating collectors. Even when collectors drive up prices, they typically make those collections accessible to the community, and that’s good news for everyone.

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