Your Life Simplified

Quantity or Quality? Valuating Your Collectibles (29:49)

January 7, 2020

From stamps to cars and wine to fine art, there are thousands of different collections that enthusiasts buy and sell, but how do you know if your collection is better at accumulating value than dust? We’re joined by Laura Doyle, vice president, art, jewelry & valuable collections manager at Chubb, who shares her experience in helping her clients appraise, restore and preserve their collections. We explore what collectors just getting started should know, what insuring a collection looks like and how profoundly the provenance of an item can impact its value.


George Fernandez: Thank you for downloading another episode of Your Life, Simplified. My name is George Fernandez, and I’ll be your host for this episode. On today’s episode, we’re talking about one of my favorite topics and that’s collecting. It probably goes without saying that people can collect just about anything. In fact, if you can see it, touch it, smell it or even taste it, you can probably collect it. No matter what you collect, it doesn’t necessarily mean that what you collect actually accrues value. What may be valuable to you, may not necessarily be valuable in the next person, such as a family heirloom you’ve inherited. But in those rare cases you did inherit something unique, like in an episode of Strange Inheritances, it’s important to understand what you should do. And of course, sometimes you may want to be more intentional about what you’re collecting, so we’ll talk a little bit about that too. Today we’re going to focus our attention on helping you distinguish between what collectibles have value and if so, how to properly manage those collections. We have our guests, Laura Doyle, art and jewelry and valuable collections manager from Chubb Insurance here with us today. Laura, welcome to the show.

Laura Doyle: Thanks for having me.

George: It’s great to have you here.  I have my own passion that I place on collecting. I’m curious to understand how you got started in helping folks take care of their valuable collections.

Laura: Sure. I had studied art history and business and really wanted to find a career at the intersection of the two. In college, I had the opportunity to work at a regional auction house, which was a great experience in terms of getting exposure to a wide range of objects and insights into valuation. Then after graduating I had worked for a private collector, which was another great opportunity to be hands on with the collection. So ultimately, that process of managing and protecting a collection and all of the logistics that go into it were of interest to me, and I found my way at that point into art insurance. And at Chubb, our clients include successful families and individuals, and they range from people who are just starting to collect, up to some of the largest collections in the world. Our goal is to help those clients protect and manage their collections—whatever the objects might be.

George: Well that’s really fascinating, Laura. It’s really great to hear stories about how people get started in their careers and one of the things when you’re able to connect your passion to what you do each and every day. We think about collecting—let’s start off with just talking about it in general terms—my guess is you’ve seen a lot of different types of collections over the years, and I’m curious to understand why the fascination with collecting. Why does it exist? Why do people collect?

Laura: Oh, that’s a great question. I’ve spoken to so many of our clients who collect because they are so driven by a passion for these objects. And in many cases, it’s like a disease they can’t stop buying. And in some cases, that’s why they have more objects than they have space in their home. And we start to see a lot of them using storage facilities to house some those objects. But there’s no limit to what you can collect. We have clients who collect everything from blue chip artwork to antique weather vanes to whiskey. And again, it’s really because they have such a passion for those objects, and in many cases, a really high level of connoisseurship. It’s just something that they’re really driven to find these objects. I would say in some cases, we also have collectors who are looking at the investment potential of some of these objects. Then of course there are people who are looking at both objects from a passion and an investment perspective.

George: I can certainly understand that. I’ve always been fascinated with science fiction art and comic books for a number of years. In fact, I also collect vinyl. My vinyl collection is really for me to enjoy, sit back and listen from time to time. But what’s interesting is, I was just talking to one of my daughters who also loves comics, and we were just having this conversation about stepping it up and actually looking at early additions of specific comics and maybe building a collection that holds value or actually potentially increases in value. And so, do you find that common for folks to kind of shift gears like that?

Laura: We do see that. I think some collectors are very strategic with what they’re buying. They start out because it’s such a passion, and then they might’ve been lucky enough to buy something when the artist’s market was that at a lower point. And then they’re able to realize significant profit on some pieces if that market has gone up. I think that they, in some cases, are really interested in that potential for growth. But in the end, we always tell clients, you never know what’s going to happen. Make sure that you’re buying what you love, so you won’t be disappointed in the end if you don’t end up making a profit on something. You can always enjoy something aesthetically, even if it’s not appreciating monetarily.

George: That’s a really great point. You also said something a little bit earlier about blue chip art. Can you explain what blue chip art is?

Laura: Blue chip art would really be pieces that are works by artists who are very established. The most valuable works of art. And so that would be artists like Picasso and Jackson Pollock, Mark Roscoe. Those are artists who have a body of work that is very well represented in museum collections, major collections. Those pieces tend to drive some of the highest values in the market. So, pieces that are blue chip, would really be by a well-recognized artist and command are really high value.

George: It is fascinating and interesting to find out why people collect over time. When we start thinking about the next level where people start assigning value to collectibles, help us understand what makes something valuable.

Laura: That’s a great question. A number of factors can impact the value of an object—obviously who the artist or who the maker is, the condition of that item, and how rare the object is, but also things like provenance. Provenance is the ownership history of an item. That would mean who’s owned it, where has it been exhibited, where has it been bought and sold. And if something has an interesting provenance, that can significantly impact the value. For example, items that were previously owned by celebrity or by royalty tend to sell for a premium. Just this past year, Sotheby’s auctioned a diamond and pearl pendant that was owned by Marie Antoinette and had an estimate before the sale of $1-2 million, and that item ended up selling for over $36 million. Obviously, because of that provenance coming out of Marie Antoinette’s collection. So, there’s a number of factors that can impact the value.

George: Wow, that’s incredible. I imagine the person selling that was very excited about that. I also just recently read and keep going back to my comic books. As you can tell, I probably am a little bit of a fan. I was just reading an article about an early edition comic book, and you mentioned the concept of provenance, and that’s a really important piece because in this particular comic book, it sold for much, much more because it was owned by the person who bought it when it was first issued, and it had been held in this person’s collection or personal belongings for more than 70 years. The fact that it didn’t get sold and resold and resold actually added value to it. It’s really kind of interesting how kind of all this stuff works.

Laura: Another one like that is Jackie O’s costume pearls. Those are something she probably bought for under $100. Those ended up selling at auction for over $200,000. Again, because they were coming out of Jackie O’s collection.

George: That’s incredible. I guess when you look at this, and you mentioned the auctions, you have to go to and obviously the folks who are bidding on these, they’re driving some of that value because they’re willing to pay for it. So, if I’m new to collecting, let’s say I go to one of these auctions and want to consider making a purchase, how can I go and be better informed? What should I do or what should I know before I attempt to go into an auction house like that?

Laura: Well, it’s important to do your research. You want to understand if you are buying a work of art, you want to understand that artist’s market, historically where have their items sold and at what levels. You can certainly go visit galleries. We always tell collectors before you commit to a purchase, just look as much as you can. Go to museums, go to galleries, understand what really interests you when you’re in the galleries. Dealers are very open and willing to talk about the items that they’re selling, so ask them questions. Find out about the artist’s inspiration, if they’ve ever been exhibited anywhere. Get as much information as you can. Then when it comes to auctions, auction records are public information, so for the most part, auction houses, especially the larger auction houses, will have websites that lists databases of past sales. So, you can actually research what similar items by the artists that you’re interested in have sold for in the past. I always recommend doing a lot of research on that pricing before you go into an auction because it’s easy to get caught up in the excitement of that. You want to make sure that you’re making an educated purchase.

George: So, you’ve just described what it takes to make a purchase at an auction. Let’s flip it on its head a little bit. You hear those stories about people going into their parents’ attic after they pass, and they’re cleaning it out, and they come across something that they think might have some value to it. What happens in that case? How do you do the research on that?

Laura: Similarly, if you’re inheriting something, I always recommend if there is any type of documentation that comes with those items in terms of invoices, artist’s fact sheets, prior appraisals, whatever documentation that might be affiliated with those items, make sure you hold onto that. Because again, that can be part of the provenance, and that can really help to support evaluation. There are a ton of great resources online. I always recommend that collectors reach out to an appraiser. There are three main appraisal organizations, which are the Appraiser’s Association of America, the American Society of Appraisers and the International Society of Appraisers. All of those organizations have experts in house who specialize in different genres. So you’ve got people who are sports memorabilia experts or pop cultural memorabilia or fine and decorative art experts, and they have a certain level of education and experience with the market, and they are great resources to be able to come in and really help you understand what you have, what was inherited and what the potential value of those items is. You can reach out to any of those experts and certainly that’s something that I would recommend to make sure that you’re working with someone who is reputable and has the requisite educational background to really be commenting on those pieces.

Brian Leitner: Thanks again for downloading this episode of Your Life, Simplified, which is produced by Mariner. At Mariner, we’re here to serve as your advocate. We help people chart a course to reach their personal and financial goals so that they can have greater peace of mind that may lead to a more fulfilling life. We do this by always putting our clients first because, as fiduciaries, we’re required to provide guidance that’s in the best interest of clients, not in the best interest of a company or shareholders or anyone else. So, as you listen to this podcast and have questions about your own financial situation or would simply like a second opinion, or have an idea for a future podcast, please email us at [email protected]. If you found the information on this podcast valuable, please share it with friend or family member you think might benefit from this information. And please, don’t forget to subscribe to this podcast so you don’t miss an episode. Thanks for listening. And now back to the episode.

George: So, if I have a general idea of what something might be worth—maybe it’s a baseball card that’s signed by Mickey Mantle or it’s a painting or it’s a car that I inherited from my grandfather who’s had it for 75 years, something along those lines. But it’s a collection I’ve had over time, and it’s accrued in value. I’m guessing I would want to protect that. This is what you work with every day. What does that look like? Can you walk me through the process of how you go about protecting that collection and is it different depending upon what kind of item that it is?

Laura: Yes, we really look at protection in terms of both the physical protection of the asset and then the financial protection. When it comes to physical protection, there are obviously certain things that need to be done based on the object and the material. And certain things are more sensitive than other objects. But in general, once you have a valuable item to protect it, you should think about things like environmental controls, and that’s one of the most important things. That means lighting, temperature, humidity. You don’t want a work on paper or a photograph, which are two materials that are really light sensitive, to be overly exposed to either natural or artificial lighting because those objects can see irreversible damage, and that can really impact the value. When it comes to temperature and humidity, museum standards typically call for 70 degrees and about 50% humidity, which, in some cases, can be difficult to maintain at a private residence versus a museum. But really the key there is to make sure that there’s not rapid fluctuation, so you don’t want the temperature and humidity levels changing within a short period of time and the rapid progression because that can actually weaken the object or even lead to mold growth on that piece. We also always tell collectors to be mindful of where you’re installing objects. You generally would like to avoid installing items directly under bathrooms or water lines or even air vents that could eventually leak, and then you want to be thinking about things like burglar alarms and smoke detectors and having that comprehensive protection in place from a fire and burglar perspective to safeguard those objects. When it comes to financial protection, I always recommend to collectors that you want to be updating appraisals on a regular basis so that you always have a clear understanding of the value of the item. We always recommend insuring those pieces so that you’re protected against financial loss in the event an object is damaged. So those two pieces really go hand in hand—getting updated appraisals done, making sure that you’re insuring for that value and then making sure that the item is physically protected wherever it’s going to be stored or displayed.

George: So, when you say you should have the appraisals done on a regular basis, can you help me understand that a little bit? Is that every year or only when the market has changed? What’s the actual frequency?

Laura: We typically recommend three to five years, but again, that can really vary based on what the object is. Some items increase in value much more quickly. For example, post-war art, contemporary art—those are two market segments that, historically, have increased fairly rapidly. And so, for some items we’ll recommend the clients have those appraised every one to three years so that they can stay in line with those market fluctuations. But then there’s other market segments, which have really been flat in recent years. For example, decorative arts and antiques, which is known in the trade as brown furniture. Unfortunately, that’s a market segment that just really hasn’t appreciated. Part of that has to do with just changing tastes and what people are collecting now and what the younger generations are rarely interested in buying. Some of these large, antique pieces just really aren’t as marketable. We typically recommend having those appraised maybe every five to 10 years just because they’re really not fluctuating in value. In some cases, objects have actually gone down in value in recent years.

George: It’s very interesting. So, when you think of theft, it’s probably a different issue if you have a signed baseball sitting on the shelf or on a desk or a family heirloom sitting on a shelf somewhere, even at painting hanging on the wall versus a large piece of antique furniture. So how common is theft?

Laura: It’s fairly common. It’s not the most common source of loss. The most common source of loss is actually damaged in transit followed by water damage. But we do see that happen on a regular basis. And to your point, it’s not going to be the really large armoire. It’s typically smaller, more portable items. Theft happens most frequently with jewelry when you’re talking about collectible items. So, it’s really important that collectors are cognizant of what type of security and protection they have in their house. Then anytime they’re traveling with items, if you’re bringing jewelry on vacation, if you are going to be traveling with pieces, you need to make sure that you keep those on your person, either wearing the items, in a bag that you’re holding or that you’re storing them in the hotel vault but not the in-room safe, which can be fairly easy to open, easy to access. Really just being aware of your surroundings and really what you’re traveling with. When it comes to jewelry, we actually have a number of clients who will have replica pieces created that are essentially imitations, not the real thing for when they’re traveling, so that they can feel like they’re traveling with jewelry, but they’re not bringing their most expensive pieces. And when objects are stolen, some people have this concept that the black market or artwork and things sort of disappearing into collection. But the reality of it is that once an object is stolen, it can be very difficult to resell. There are a number of databases that track lost and stolen objects. The FBI maintains one, Interpol, the art loss register and a number of other databases that are online and those databases are accessible and searchable by the public. Most reputable galleries and dealers and auction houses are always going to check those databases. Before they would accept a consignment items, which would mean, accepting something to sell, they’re going to run the piece through those databases just to make sure that there are no title issues, and the object was not stolen at some point. If you have an object that’s stolen and especially if it’s insured, that piece is always going to be reported to one of those databases. And then those companies, the private companies, are really constantly tracking and combing through listings of artwork to make sure that none of those pieces flagged as being stolen or actually listed on those databases.

George: So, after something has been stolen, how often do you recover it? Is it common?

Laura: It can take years in some cases. In 2016, we actually recovered a Norman Rockwell painting that had been stolen from our client in 1976, so that was a 40-year time frame between the piece being stolen and recovered. I would say when objects are stolen, it can be years before those pieces are tracked down.

George: Got it. So, you said that it’s important to be mindful of where you actually put them. What kinds of things have you seen, in your experience, perhaps things not being put in the right place? What’s happened to them?

Laura: We have seen everything. I would say there have been a number of losses from clients who have hung paintings over fireplaces that they are actively using. And that results in both smoke and damage to the surface. But also, the heat from the flue in the wall behind can actually start to impact the structure of the canvas and start to distort those works. We’ve seen losses from that. We’ve seen clients who have installed artwork near air vents, and along the same lines, if there’s hot air coming out of an air vent or cold air and that can result in moisture. We’ve seen losses where that fluctuation in temperature has impacted the piece, as well as water dripping down onto canvases. Another common cause of loss would be pieces that are installed in really high traffic areas. If you have a work of art that’s installed near a doorway or in a narrow hallway, pieces that are just more susceptible to accidental damage from getting bumped into. Or if you have young children who might be really active, and in that area, brushing up against pieces has caused surface damage.

George: Does crayon coloring on top of a piece cause a loss too?

Laura: A few years ago, our client’s toddler took a marker to a very valuable piece of contemporary art that was really large format. So, it was installed fairly close to the ground all the way up to the ceiling. It was very easily accessible to him.

George: Oh my, that’s pretty frightening to me. That’s really why I stick to these low-level collections. I don’t have to worry too much about that. Although, I have to admit, I would be pretty upset if one of my kids scratched one of my records.

Laura: Even from pets, we have seen both cats and dogs that have impacted artwork and decorative art collections. We had a client who had a large, lab or golden retriever, and the tail ended up swinging into a Tiffany lamp and knocking that to the ground. I would say just think about your lifestyle and what makes sense to collect and where those objects are located when you’re thinking about protection.

George: Yes, that’s a really great point. I think I will just recommend that you don’t have pets or kids if you’re going to collect anything. Just kidding, of course. When you look at collecting, there are going to be times you’re going to be purchasing things from across the country. And I would imagine that there’s a certain process you have to go through to actually move it to you as well. Is that correct?

Laura: Right, exactly. You don’t want to be rolling up your canvas and shipping it through FedEx or UPS. There are trained art handlers who are available to pack and ship artwork and all types of valuable collections. We always recommend working with a professional. They’ve got expertise in handling valuable and fragile objects, and they understand how to properly pack and crate those pieces so that they’ll be very secured when they’re in transit. And then, in addition, those shippers would obviously have trucks that have climate controls and air ride suspension and, in many cases, also GPS tracking and security system, which is something to think about if you’re shipping high value pieces, particularly if those items are going long distance. Shipping is always a really critical aspect of collecting life cycle. I’ve got collectors who will buy online or buy at auction and they might not be there in person and so that piece is going to be shipped to them, in some cases, across country or internationally. You really want to understand the chain of custody and how those pieces will be protected as they’re being packed and shipped.

George: When you say chain of custody, you really mean ensuring that it’s handled properly?

Laura: Exactly. And a lot of shippers will only offer it in a regional area. Not all shippers will go cross country when it comes to art shippers. In some cases, they will actually subcontract out transit to a third party. You always want to understand, is the company that you’re hiring to do the transit from point A to B or, are they subcontracting out to a third party? And if so, who is that third-party, are they maintaining the same controls we had several years ago? A client that was shipping a valuable collection of wine from the Northeast down to his residence in Florida, and the company that he hired ended up subcontracting that transit out to a third-party. It turns out that that third-party did not have refrigerated trucks. As you can imagine, wine is very sensitive to any changes in temperature and humidity. Going from the Northeast down to the hot, humid climate of Florida ended up destroying all of the wines.

George: Oh my gosh, that’s, that’s just awful to think about if you’re the one who had that collection. It makes me think of another story, and I think I might’ve actually heard this from you at an event where you were speaking, you were sharing a story about this British street artist, Banksy. Can you share that story? I was fascinated by that story. And then I have a question afterward.

Laura: Yes, so Banksy is an anonymous street artist based in the U.K. There have been a lot of stories about who he actually is over the years, but he’s never public publicly identified himself. A lot of the works that he does are stenciled onto public buildings and, oftentimes, social and political commentary is the theme of those pieces. He’s a really interesting artist, and some of his works were actually done on canvas. So last fall, one of his canvases had come up for auction at Sotheby’s in London, and it was this interesting piece called, “Love is in the Air.” It’s stenciled work of a young girl holding a balloon that was a heart and then lifting up into the air. So that item was sold at auction, and as soon as they hammered down the gavel, the piece which had been mounted on the wall in this sort of ornate gilded gold frame. There’s this beeping sound, and all of a sudden, the canvas fell through the frame, and came out the bottom of the frame in shredded pieces of canvas. So, there was a shredder that was built into the frame, unbeknownst to everyone who was in the room bidding on this piece. There are a ton of YouTube videos out there. It’s a really interesting thing to watch this happen. Nothing like this has ever happened in an auction room. And so, it turns out that Banksy had built into this frame the shredder and a piece transformed during the sale. He actually renamed it from, “Love is in the Air” to, “Love is in the Bin.” And the piece, if you look at it now, essentially is halfway through the frame with these shreds of canvas hanging out of the bottom.

George: Is it worth more before or after it was shredded?

Laura: I got that question from a lot of clients, and this is an interesting piece. This is essentially a performance piece, and this was always his intention to have this done. Our opinion, and I think this is broadly the opinion of art appraisers, is that the piece is now worth more than it was previously. And again, it goes back to that idea of the history of the piece, the provenance, the fact that this event was so public and well-documented. Absolutely this piece was more valuable than it was before. And in fact, the new collector is obviously going to keep it and display it in this new current format.

George: I do find that story very interesting. Well, thanks again Laura. I really appreciate you being with me today. This has been really helpful, and as I shared before, I am passionate about this topic, and I know you have a busy schedule, so I really do appreciate you being here.

Laura: Thank you.

George: Before we close out our show today, I want to thank you for listening and quickly mention that if you do have questions about today’s podcast or any other podcasts that we have, be sure to let us know at [email protected]. Thanks again for listening and don’t forget to subscribe.

The views expressed are for commentary purposes only and do not take into account any individual personal, financial, or tax considerations. It is not intended to be personal legal or investment advice or a solicitation to buy or sell any security or engage in a particular investment strategy.

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