How to get started in the booming art market

With the stockmarket looking set to continue the year much as it started it - drifting slowly down - investors are increasingly looking at ways of moving into more tangible, and hopefully more profitable, assets. One way to do that is via the arts and antiques market.

Zurich Financial Services published figures in 2002 showing art and antiques to be one of the most lucrative investments: over the previous 25 years, high-grade collections had risen in value by more than 785%. The art market has also held up nicely during the downturn of the last few years, points out Ellen Plant of Christie's, particularly when it comes to post-war and contemporary art, where prices are absolutely booming.

Still, that doesn't mean investing in art is easy. "The art market is the last great unregulated financial market. This makes it enormous fun and highly dangerous," says Robert Hiscox, chairman of Hiscox insurance, which once assembled a great collection of 20th century art. The gamble isn't only on the quality of the artist and their work, but on fashions, taste and marketing. "But if the eye is good and you get good advice, you do make money." Moreover, "if you are getting constant pleasure from the art even a low return is a good bonus."

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Perhaps, but with prices having risen so much in the last few years, is it still a good investment? The answer, according to Mark Poltimore of Sotheby's, is that there is still growth left, but it won't be across the board. Just as the rule in property is "location, location, location", in art it's "quality, quality, quality". At the same time, it is worth noting that the art market will always be affected by fashion and trends. For example, the terrorist attacks of September 11 had a knock on effect on the appeal of Middle Eastern art, while the rise of a new class of super rich in China, Russia and India is likely to keep pushing up the prices of pieces from these regions. In the West, the investing focus is more on the contemporary art sector, largely due once again to rising disposable incomes among the chattering classes.

But how do you get started investing in contemporary art? It isn't easy, says Sarah Vine in The Times. To the inexperienced, "the world of contemporary art is as inscrutable as the Mona Lisa's smile". That said, there is a "huge body of excellent, accessible new work out there; the trick is just to find it".

The first step is to "make a commitment". Unless you're prepared to get to know the art, you will always be "flying blind". Alicia Miller, head of education at the Whitechapel Gallery, suggests a two-month immersion period before you buy: this means trying to read one review and visit one exhibition, opening or private view a week to tune your mind into the kind of work on offer. Look at enough art, and you will start to form your own ideas about "who the ground breakers are, who stands out, and who is merely derivative".

It is also a good idea to visit graduate exhibitions at Goldsmiths College, the Royal College of Art, Chelsea School of Art, Central St Martins, Wimbledon and the Slade, and to pop into the various art fairs, such as Frieze, a "glamourous buzzy affair", which is coming up in October (www.friezeartfair.com). Finally, once you are ready to buy, says Miller, "follow your head as much as your heart". Spend some time thinking about a piece before you buy it. "How do you feel about it? What emotional and intellectual effect did it have on you? Does it make you see things differently?" If the answer to the last question is yes', it's time to start a collection.