Ask a rare and antiquarian book dealer if their tomes are a good investment and most will say not to view owning books in those terms – probably while quietly assuring you of the investment potential.

The scarcity of a book is far more important than age in determining its value. One of the few hundred or so 10-year-old first edition initial print run of Harry Potter and the Philosopher's Stone would set you back an estimated €15,000.

First editions are the holy grail of the book trade. For the uninitiated, identifying them is the first challenge. There's a lot to learn. Book & Magazine Collector is a good periodical to start to learn about the trade, with reader-friendly essays on speciality markets. Like any trading market, knowing what to buy and what not to is the key to success.

Let's start with what to avoid. The lower end of the market. Many titles previously considered quite rare are proving much more common, as more internet sellers means more books offered. Not only are cybermarket prices forced down, but auction houses and dealers suffer too. Not much prospect of a profitable return there.

At the higher end, Chris Albury of Dominic Winter, a book auctioneers with customers around the world, warns potential investors against sharp practices that have begun to emerge. One example is advertising a book at say, €2,000, that didn't sell when previously advertised a couple of years earlier at €1,000. The book may well be described as having risen 100% in value over that short time, even though it never changed hands. Take advice from a reputable dealer.

Albury strongly advises anyone considering investment to concentrate on finding real rarities that are in exceptional condition – and being prepared to hang on to them for 10 to 20 years or more. His top tip is to research books that sold well in the past, are currently out of vogue, but have inherent quality that makes them candidates to become fashionable once more. A favourite category at present is colour plate fine printing books from the early 19th century, typically featuring landscape views and travel. Riding high in the 1980s, their price has dropped significantly since then.

"They are simply too special not to come back," Albury says. "They have a wow factor just looking at them. But whatever category of book you decide upon, buy the best examples you can find."

So what sort of return may be expected? There's been very little analysis of returns on investment in books or published indices of individual book values. In 1998 Kenneth Hill, a retired American stockbroker, applied his financial expertise to evaluating the return on some of the more desirable books in his collection. His conclusions were that over the previous 35 years quality rare books performed broadly in line with world stock markets, but books are much less liquid of course. When the economy is healthy, the collectibles market usually is too. When the pressure's on economies, so is it for the book market – although some may see books as a good hedge bet in difficult times.

As Tom Congalton, owner of American company Between The Covers Rare Books, advises on his website: "Don't buy your rare books from your financial adviser and don't have your bookdealer plan your investment or retirement portfolio." Wise words.