Michael Mendelsohn, author of Life is Short, Art is Long, says in the early pages of his book that he never expected to find out that he had anything in common with William Randolph Hearst, Imelda Marcos or Queen Elizabeth II.

He does not have a big estate overlooking the ocean, a thousand pairs of shoes lined up as far as the eye can see or an engagement any time soon to open the British parliament.

But what he shares with this illustrious trio is that they are all “part of the same species”, one he refers to as “accumulators of stuff”.

Mendelsohn leaves the reader in no doubt as to his passion for collecting this “stuff”. After all, art is not merely an investment, he points out; it is a love affair.

The book is full of insights into what drives him and others like him to accumulate. “A true collector,” he says, “knows that collecting is a quasi-religion; a way of life that infuses the essence of one’s being. It is part concept, part process, and part belief, alternately emotional, intellectual and sometimes both at once.”

While some of Mendelsohn’s no doubt earnest passion can seem a trifle flaky, he retains an endearing sincerity and quickly backs up his more passionate musings with practical suggestions as to how collectors can buy cleverly while indulging their desires. He even suggests that passion felt for a piece can be a good indicator of its worth.

“I compare people who buy art as an investment to those speculators who found themselves trapped in the Nasdaq stock market in the late 1990s – the artist de jour whom everyone swears is the best investment ever is no less a potential market bubble than a dotcom,” he says.

He relates the cautionary tale of a London-based pension fund that tried to become the first art-based mutual fund. The fund’s return on investment was 8 per cent, but that came from only a few items. Everything else was a failure.

Mendelsohn writes clearly and gives sensible advice about some of the rules and complications of art appraisal, trusts, found­ations and insurance, and how to navigate the potential minefield of dealers and auctioneers.

A well-known figure in art investment circles, Mendelsohn is the founder and president of Briddge Art Strategies, a prominent US art succession planning firm. He is also an art collector, philanthropist, lecturer and frequent writer on inheritance planning and preservation of assets. With his wife Gael, who collaborated on the book, he is one of the top 100 collectors in the US.

Mendelsohn breaks down his thoughts on investment by tapping the brains of several other leading art collectors. One of the most interesting passages desc­ribes how art can be used as an asset diversification strategy and why such strategies are becoming more popular.

Peter Hastings Falk, author of this section, says that what has recently caught the attention of financial managers is the ability of econometricians to be able to make sense of large amounts of transaction data regarding the art market. He points out the recent availability of art price information in both electronic and printed forms has provided a new dimension of access to a larger audience, as the art market becomes transparent for the first time. Hastings Falk has provided advisory services for collectors, corporations and artist estates for more than 30 years.

Record prices, he adds, are rarely accidental. The art market has attained the underpinning of increasingly commodity-like behaviour which, in turn, has become the source of its consistency and security. This is probably the reason wild price fluctuation in the art market is rare.

Other contributors include Elizabeth Clement, director of her own consultancy, on the value of obtaining an expert appraisal before buying or selling at auction. She points out that first-half 2006 art sales at the two largest US auction houses alone totalled a staggering $4bn.

Also included is a contribution by Alexandra Duch, who examines the relative merits of public and private sales. And Suzy Peterfield-Ross looks at how market forces can depress auction results.

Norma Roth highlights the perils of off-site storage in a passage called “a rainy day story”. She relates how her collection, compiled over 25 years, was threatened by the appearance of a small leak, which led to a tale of unscrupulous builders, Florida storms, inadequate insurance and a two-year clean-up operation.

Insurance and inventory are given comprehensive treatment through, among others things, more cautionary tales. One relates a series of incidents that occurred when, in early 2006, the Milwaukee Art Museum provided the venue for a $30, all-you-can-drink “Martini­fest”. Almost 1,900 people showed up, mainly a young crowd intent on drinking their money’s worth. Several guests threw up on or next to priceless works of art and some young men were seen climbing on Gaston La­chaise’s sculpture “Standing Woman” and making inappropriate gestures while photographing themselves with their cell phones.

The moral of this tale, says Mendelsohn, is that collectors should check out a museum’s event policies before they loan a piece.

Life is Short, Art is Long, to be published in April, is a valuable guide, particularly for a fledgling investor.

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Copyright The Financial Times Limited 2007