Where to get the lowdown on the world of low-cost art

Not all art collectors are high net worth individuals puffing cigars in massive country retreats protected by electronic gates and vicious-looking guard dogs.

Not all art collectors are high net worth individuals puffing cigars in massive country retreats protected by electronic gates and vicious-looking guard dogs.

Indeed a number of exhibitions and fairs now specifically target individuals with only modest means, and these are proving increasingly popular with those who have been disappointed by the returns they have achieved from stock market-linked investments during recent years.

Paintings and other collectables, like shares, can of course go down as well up in value and most experts emphasise that the primary consideration should be to focus on an item that you will enjoy living with and looking at. But there is always the chance that an initial outlay of only a few hundred pounds could become worth many thousands of pounds if you latch onto the right thing at the right time.

The key to making money is to identify one of tomorrow's stars rather than buying from someone whose popularity has already peaked.

Robert Travers, a west London-based dealer specialising in 20th-century British painting, says: "Someone who bought work from an artist even as well known as Augustus John when he was at his peak in the 1950s could find they have actually made a loss in real terms.

"I know from being in the business for 20 years that those collectors who have made the most money from haven't followed fashion but have gone for something they really connect with. Forget all about the bumph and research you are handed and ask whether the piece in question speaks to you as an individual. If you can make a connection with it then another buyer may be able to do so in the future."

Any immediate itches to speculate can be satisfied by attending ARTfutures, the Contemporary Art Society's annual art market, which is still running today and tomorrow. This is situated at the City of London school just across the Thames from the Tate Modern gallery and entrance is free.

ARTfutures is unusual in that, unlike with most fairs and exhibitions, the public is invited to buy from selected artists rather than from dealers, and in that it has a maximum permitted sale price of £4,000 per item. The event, which brings together 120 of the best contemporary artists in the country, has an impressive track record for recognising emerging talent. Past exhibitors who have gone on to great things include Damien Hirst, Sam Taylor-Wood and Douglas Gordon.

Visitors with £1,000 to £2,000 to spend will be able to buy prints and drawings from very senior British artists like Basil Beattie, Paula Rego and Susanna Heron whilst prints from younger British artists like the brothers Jake and Dinos Chapman and Tracey Emin will be selling for £350 to £500.

Nevertheless it could be the less familiar names that in due course produce the highest returns and Gill Hedley, director of the Contemporary Art Society, has little difficulty in singling out a couple.

She says: "Stella Vine will probably fly this show and we have four of her pictures that will sell from £700. At the beginning of the year she was nowhere and now that Saatchi has bought some of her work she is the talk of the town.

"Nikola Savic, whose work (above, inset) is based on mechanical parts that float across the canvas, is another to watch out for. Last year his large pieces sold for between £2,500 and £3,000, but because he has subsequently been picked up by several large City financial corporates, similar-sized pieces by him are fetching £6,500 to £7,000. This is well beyond our maximum limit but this year we are still selling smaller pieces by him."

The Affordable Art Fair, which is held twice a year in London and once a year in Bristol, also offers reasonably priced access to contemporary artists, and has an even lower price ceiling of £2,500.

Although its Bristol fair is taking place between 21 and 23 May, the next London one is not due until October. This, like all its London fairs held in October, will include a showpiece section for recent graduate work from 15 to 20 short-listed up-and-coming artists.

Simon Keenleside and Andy Spain, who featured in the October 2002 graduate section, and Maria von Kohler, who was in the October 1999 one, are all artists whose work has subsequently shot up in price as a result of being of interest to serious collectors.

Low value items with considerable potential can also be picked up by attending auctions and by visiting reputable dealers, and it is not only paintings that are capable of rocketing in value. Other art collectables which have not always enjoyed the publicity they deserve include modern pottery and posters.

John Howard, a dealer specialising in British pottery based in Woodstock in Oxfordshire, says: "If the performance of 19th-century pottery, some of which has been rising faster in value faster than London property prices, is anything to go by, then 20th-century items could produce rich rewards. Twenty-five years ago animal figures made in Staffordshire during the 1850s were selling for £30 but now they are selling for about £3,000. Although this sounds hard to believe it is one hundred times as much!

"Having a classic design that is iconic to the 1960s can be all-important. A 1960s Denby coffee pot with an Arabesque pattern could cost as little as £70 now but in 50 years' time that pattern will be quite rare. Wedgwood animal figures designed from the same period are selling for £100 to £150 and may also increase in value, but not so spectacularly."

Posters can be worth anything from a few hundred pounds to £50,000, with the most significant determinants of value being age, rarity and the actual image itself.

Most posters of any interest date back to before 1950, with the notable exception of film posters, which can produce quite desirable items from the 1970s and 1980s. Because any momentum in poster sales has been restricted to the last five or 10 years, many people may in fact already have an item of value rolled up in the attic that they are not aware of. Christie's, which has the largest selection of poster sales out of the major London auction houses, is always willing to give free valuations to those who send images by e-mail or post.

Mark Wilkinson, a specialist in 20th-century decorative art at Christie's, says: "At the moment vintage film, ski and travel posters generally are especially in vogue. A travel poster with really bright art deco and with a prominent place name can be highly valued by those who live in the area concerned as well as by more serious collectors."

'Art is a better buy than equities'

When Phil Ashcroft, 33, won a Damien Hirst watercolour in 2001 from a competition in The Idler magazine he understood it to be worth a couple of thousand pounds.

He had the untitled red and blue abstract valued in January, and it is now worth £6,000. Phil, an artist who lives in New Cross in south-east London, says: "I feel it has gone up in value because, like Hockney in the 1960s, Hirst has acquired genuine status and is not just a fad.

"The return I have achieved in three years is certainly far better than I have managed from my Isas and if I ever come into any spare cash I will be putting it into art rather than equities.

"I could have sold it as soon as I'd won it, but I realised it had good investment potential and I was never seriously tempted. I intend to hold it until my retirement because I am confident it will perform better than my pension fund."

Phil says his knowledge of the art field will be invaluable in making purchasing decisions and that he may opt for work by friends.

Although he is selling work at ARTfutures - most of it in the £50 to £1,500 range - he is not yet living entirely off his art and works full-time as an administrative assistant.

FACT FILE: THE INS AND OUTS OF CONTEMPORARY ART

Anyone seeking to identify emerging artists at ARTfutures can do so in the knowledge that all the exhibitors have been selected by the Contemporary Art Society, a body that boasts a formidable wealth of expertise.

Since 1910 the society, a registered charity, has presented over 5,000 works of contemporary art to its member museums throughout Britain by artists from Henry Moore, Francis Bacon and David Hockney to Anthony Caro, Damien Hirst and Bridget Riley.

Nevertheless, some exhibitors at this year's event are inevitably attracting more attention than others, and amongst those not to be overlooked is Marta Marce, whose work on show is inspired by the notion of play - "exploring the relationships between my painting and games". Marta's art has a risky intensity which lovers of big bold canvasses will find particularly appealing.

Another not to be missed is Dan Preece, whose work has been a feature of ARTfutures since 1996. He has new work on show with a real urban edge to it.

But even these may find themselves playing second fiddle to Nikola Savic, who reconstructs machinery parts on canvasses to create an alternative set of dynamic shapes that convey movement and depth within the painting. The colours are deliberately opaque, often using the white silkscreen paints that allow other colours to recede and producing gradations of colour across the surface.

Stella Vine has been the target of a great deal of recent press and media attention. Her works have just been bought by Charles Saatchi and are in the New Blood exhibition.

Stella is a self-taught painter and curator who is influenced by artists such as Tracey Emin and Karen Kilimnik and by poignant writers such as Sylvia Plath and the Brontë sisters. She depicts close friends and family as well as celebrities such as Princess Diana and Nigella Lawson, placing them in scenarios inspired by controversial anecdotes with a touch of humour and emotional empathy.

The London-based sculptor Keith Wilson represents another star attraction. He has created works in galvanised steel and wood, including one called Monet's Bridge for the terrace, a space that does his work justice. The piece is then mirrored inside the show.

On a much smaller scale, perfectly executed mini models in balsa wood by Jo Ray are also creating their fair share of interest. These depict interlocking staircases and platforms measuring just 7cm.

Photography figures prominently as an art form at the event, ranging from the mellow still-life studies by Georgie Hopton to the wild, beautifully lit rugged landscapes by Uta Kogelsberger.

FACT FILE: AN EXPERT VIEW

Whilst it can certainly be tempting to rush out and invest hard-earned cash in the work of an artist tipped by an expert to be up-and-coming, never forget that most dealers, auctioneers, fair organisers and indeed artists, have a vested interest in talking the market up.

Those looking for a more objective opinion on art as an investment could therefore do worse than consider the views of The Independent's own Sue Hubbard, who writes our Art For Sale column.

Interestingly, she does not agree with the simplistic "buy what you connect with" message commonly put forward by dealers, and is adamant that beginners cannot actually "invest" in new art because it is largely the result of luck if it goes up in value. But she admits that this luck can be controlled by knowledge.

She says: "You have to understand the philosophical, critical and conceptual underpinnings of art and you can't just stand in front of it and profess to like it or dislike it.

"Nevertheless, for some reason, rational intelligent people who wouldn't dream of claiming to understand European fiscal policy without doing extensive research fail to apply the same logic to art.

"They feel that they can understand a painting simply by doing a bit of emoting but, whilst the visual aspect is undoubtedly important, there are some highly complex aesthetic factors lying behind it."

Hubbard, who has been an art critic for 10 years, acknowledges that it is possible to develop an in-depth knowledge of art and collectables to help make an informed judgement but stresses that this will take time just as it does with developing expertise in any other subject.

Furthermore she warns that even those with the greatest knowledge cannot be guaranteed to predict a trend. She continues: "You may follow in the wake of a Saatchi if you hit it just right but it is also quite possible to get the timing completely and utterly wrong. The current Saatchi exhibition New Blood has, for example, been receiving somewhat scant critical acclaim."