Here are my 10 rules for buying and collecting investment-grade fine art developed after 20 years in the business including several classes at the School of Hard Knocks:

1. DECIDE WHAT YOU DON'T LIKE. Begin with what you don't like and go from there. Decide what kind of fine art gives you the most visual enjoyment or brings out the most positive emotional response. Decide what kind of art you enjoy looking at day after day after day.

2. SPECIALIZE. Establish a focus for your collection. Concentrate on collecting the works of a specific artist or art from a certain period. What can be really fun is collecting fine art with a specific subject matter or theme! Confine yourself to a definable category of art and you will quickly gain sufficient knowledge to make informed decisions.

3. LUST FOR STUFF. But set flexible budget parameters. The cost of anything you buy should fit comfortably within your budget. However, after much hunting, if you find an absolutely incredible work, but it costs twice as much as you've allotted, find some way to buy it! It is well worth it to spend the money now and wait a little longer for the next piece.

4. THE GOOD STUFF COSTS MORE. Most people don’t want to hear it but the good stuff is going to cost more. It always has and it always will. This is true at an eBay or any other auction or from a gallery. On the other hand, the good stuff traditionally increases quite nicely in value as time goes by. Look for bargains, but if a deal sounds too good to be true, it probably is!

5. COLLECT, DON’T HOARD. Quality, quality, quality! A few masterworks in your home or office will do more for your life-style and productivity than a hundred mediocre works of art. Buy fewer but better works. And make sure they are in excellent condition! If, after a few years you end up with more pieces than you can display attractively, rotate them---you will find this does great things to revitalize your surroundings. It’s like you see things for the first time again.

6. KNOW THE ARTIST. Any artist, living or dead, whose work you acquire should have solid credentials and/or be listed in reference books. Credentials are based on art education, awards, exhibitions, honors and inclusion in museum collections. For example, in my opinion, for deceased American artists, listing in the bible of collectors, appraisers and curators everywhere, Who Was Who In American Art, is very important. Check reference books for local artist credentials in your area. These credentials and references are the cornerstones that appreciation in value is built upon. It doesn’t matter if a movie star painted the picture, unless of course MOMA or the Met show it off.

7. RESALE. Think about each piece in terms of resale. It has been my experience that an art collector goes through three or four collecting phases in a lifetime as their tastes change. Fine art is an illiquid investment. It takes a relatively long time to dispose of art to get your money and profit out compared to T-Bills, stocks and bonds, etc. If you eventually decide to sell all or a part of your collection, the ease of disposition and the amount you receive will depend primarily upon five things:

• (a) Rarity. Is the artwork unique or greatly limited?
• (b) What is the reputation of the artist?
• (c) Is the aesthetic value high? Is the image pleasing to look at?
• (d) What is the condition of the work?
• (e) What is the market environment like?

8. DON’T BE AFRAID TO ASK QUESTIONS. Ask anybody you respect about fine art. You may want to find yourself a reputable art dealer you trust. You may pay market rate but you should recoup if not profit from your investment in two ways. First, it’s almost certainly the good stuff you will be buying. Secondly, you’ll get first dibs if you are a good customer. For example, for most early to mid-20th century investment-grade American art, today it is not the price, it is the availability and who gets offered it first.

9. YOU WILL MAKE MISTAKES. Everyone does! Consider it a part of your education.

10. TAKE YOUR TIME BUILDING A COLLECTION. Collecting can provide hours and hours, if not a lifetime of fun, relaxation and reward for you and your family.