Every time the art market explodes with inflationary vigour – and it is surely doing so under our eyes today – somebody raises the spectre of colleting and investment. Is art a good investment, are collectors really investors, and what should people be looking to buy? I will attempt briefly to answer these questions with the benefit of some experience of watching the art market and the way that collectors operate.

The first question about any sort of investment concerns measurement and this is exceptionally difficult in the art market. While everybody can see a Picasso making more money at auction than it did 10 years ago, we can only guess at the insurance, storage, conservation costs, and the dealer’s mark up. Investment funds directed towards art tend not to reveal their figures and we must return to the 1970s to examine the only perfectly formed – in the scientific sense – art fund. It was the British Rail Pension Fund, brought into existence to protect the railwaymen’s money against a backdrop of 17% inflation. That fund had, as far as I know, three features which were individually unusual but together unique. First, they had access to unlimited funds – which meant they could form important groups of art in seven or eight categories and buy only the best. Most funds are restricted in their range, where the pensioners were not. Secondly, they had access to the expertise of the entire art market, though principally advised by Sotheby’s. The Fund Manager was a fiercely independent lady who could spot from a long distance an auctioneer or dealer pedalling an old dog: there are always dangers when an adviser has an interest in what is being sold.

Thirdly, and perhaps most important, the British Rail Pension Fund has unlimited time. Nothing was sold for a generation which was defined as 20 years. The Fund was a qualified success and, at the very least, the results equalled conventional investments. However it always attracted adverse criticism. Although the art works were lent to museums for the duration of the Fund’s tenure, it left a sour note in the minds of many. The conclusion that many have drawn – and I would not disagree – is that art makes money in the long term but is a poor short term investment. I am not in favour of art funds but I am very much in favour of collecting. That is the process by which we fall in love with an individual work of art, or a period or genre, and we use our hearts and minds to create something that, if we are good at it, will have a homogenous quality and may even reveal something about the subject.

Great collecting extends our vision and can change our perceptions. A visit to Kettle’s Yard at Cambridge – the least demonstrative collection I know – is a case in point. Jim Ede, its founder, had no money and bought drawings from his friends, which he set against white walls with simple furniture using stones, pebbles and twigs. Light was, and remains, all important, and in these austere surroundings the art takes on a talismanic quality. Ede put this together in the 1950’s when contemporary art was still unfashionable. Today it is fashionable to the point of eclipsing the art of earlier periods. Each year I talk to the new students of the Sotheby’s Institute and I ask them about their ambitions and tastes. Some would like to become dealers, some would prefer to be critics, but all want to collect – and on average 90% give contemporary art as their preference. Admirable as this ambition might be, they cannot all collect contemporary art, however hard the studios work: it is too expensive and much of it will be unsuitable for domestic consumption and belongs in the kunsthalles of the very rich. When I talked to the students at Sotheby’s last year, a sale of medieval sculpture was on view and I was struck by a beautiful, mournful face of Christ by a 15th century Hispanic woodcarver with an estimate of £3,000 – £4,000. This was by any standards a beautiful work of art, affordable and available. Alas such is the magnetic pull of modernism that few of the students could be drawn into seeing that to collect such art makes sense.

I have just completed survey of collecting since 1945 (to be published in the Autumn) and examined the lives and activities of 200 of the most interesting collectors of the period. What the survey overwhelmingly reveals is that great collectors, and I believe this is true of any period, find unfashionable areas to collect. They buy works of art that are relatively affordable. Even a billionaire like Paul Mellon, after a false start collecting Impressionists at the top of the market, was soon to alter his course and find his feet as a collector in the under-valued byways of English provincial art. My book reveals that the history of collecting and the history of the art market are not quite the same thing. A collector is buying a generation ahead of the market. The history of the art market is written when collectors sell rather than when they buy. Natural collectors have no difficulty in finding a good subject. My advice would be simple: make sure whatever you choose it is available in sufficient abundance on the market and that you can afford to buy the best: if not paintings then drawings, if not drawings then prints, or ceramics, or modern design, or medieval sculpture or wood engravings. Learn the subject, live it, collect, and to paraphrase Eric Gill “look after beauty and truth and the investment will look after itself”.

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