Customers often ask me if the art they are buying will go up in value. Any honest dealer will tell you that appreciation is not guaranteed, and just because prices have risen in the past doesn't mean your purchase will be worth a fortune later. This should sound like a familiar warning to any investor: "Past performance is no guarantee of future returns."

Although some people collect art solely for investment purposes, most experts agree that the best way to invest is to buy something you love. That way, whether it appreciates in value or not is immaterial; the pleasure of its company will be enough.

In general, there isn't much specific information available on the valuation of contemporary art. In the absence of specific resale data, estimating the price of such artwork requires knowledge of the principal dealers or galleries representing the artist as well as an understanding of the general price structure of works by artists of a similar standing.

In contemporary art, the value of a piece is the amount of money someone is willing to spend to acquire it. It's based on a market value of the work of that artist and his/her contemporaries - - there is no test of time. So if you are buying for investment, artists with a proven resale track record are like blue chip stocks and you need to build a collection just like you'd build a portfolio.

However, not too many people can afford the level of diversity in artwork that you'd want in a stock portfolio, not to mention issues like insurance, maintenance and exhibit space. But, you can always start an art collection, just for the fun of it.

Whether you're collecting art for investment or fun, there are some things you want to keep in mind.

1. Visit local galleries, museums, auction houses and art schools. Find out what's out there and notice what catches your eye. Take classes to develop your eye. Select an area, a medium or a subject and focus on it.

2. "Knowledge is power" and it pays to educate yourself before you start to buy. Your first art purchase should be books about the subject in which you are interested.

3. Get passionate! The best collections are put together by art collectors with a true passion for their subjects.

4. Get to know the "artist next door." Work by regional artists may be in high demand.

5. Look for "diamonds in the rough." Check out work by artists studying with the finest teachers who haven't been discovered yet. Drawings and studies may be undervalued before an artist becomes famous, so you might get a real deal.

6. Look for the highest quality of art in the medium that interests you and buy the best you can afford. Beware of "bargains" and pay special attention to the condition of a piece. A worn or torn piece is not a bargain, regardless of price.

7. Do some trend spotting: an artist or style that is not hot right now just could be the next big thing. To identify an up and coming trend, pay attention to what second and third tier art museums are acquiring. Smaller museums with tighter budgets may hit on a trend before others.

Art collections should be fluid, reflecting your changing tastes over time. This advice applies across all budget levels. And don't ignore young artists. Collecting the work of an unknown or emerging artist could lead you to the next superstar in the art world – or a lovely work that will simply grace your home for years to come.