At a time when the stock and property markets are looking dangerously unstable, many investors are turning to art as a way of diversifying their portfolios. When pieces are invested in with time and consideration, they can be a solid form of capital, and often appreciate in value over time.
So what do you need to know before becoming one of the many art investors out there? Here are a few tips to help you make informed decisions and wise investments.
First of all, it is a good idea to take an interest in art in general before spending money on it, just as with any other type of investment. While it is not necessary to have a degree in art, knowledge of the basics can be a great help to you, as it gives a chance to familiarize yourself with styles that you particularly like, as well as detailing the different types of art it is possible to buy. There is no need to limit yourself to buying paintings, as photography, sculpture and prints are some of the many other options available, and may better suit a smaller budget.
Another thing to be aware of is the rising incidence of art fraud, which has caught many unsuspecting buyers unaware. Because the internet is used so widely nowadays, it has become easy for scams to spread; such as where a poster instead of the original and/or a forgery is sold as a “limited edition” (sometimes even along with an equally fake “Certificate of Authenticity”). The best rule of thumb is to avoid buying art over the Internet as a beginner to the art market, stick to what you can see and touch with your own eyes. In this vein, good places to buy from include art galleries, the artist themselves, or reputable auction houses.
Once you have found the type of art you like and a place to buy it from, what we would most importantly advise is this: Buy something you know you like, that you could enjoy looking at every day. It is very possible that your purchase may take years to increase significantly in value, so treat buying an artwork as you would treat buying a home; as something you will live with for a significant amount of time. That way even when the market fluctuates (as will almost always happen) you will still get satisfaction from your investment.
A good way to determine whether you are choosing an artwork that will hold, or ideally, increase in value, is to look at the career of the artist so far. If they are being exhibited frequently over a number of years, has an agent, or is regularly receiving publicity in the form of good reviews, articles etc.; these are good indicators that the artist in question has a good chance of wider success and financial investment.
Once you have invested in your artwork, keep in mind that the work will need to be kept in top condition to retain all of its value in the event of it being sold again. Ask before you collect your artwork how it should be cared for. If you are considering selling your piece soon, have it appraised by a qualified professional. Once you have an idea of what your art is worth, you can establish an asking price. Remember; always sell to or through a reputable source. As you establish contacts through your art collecting, so will you get a good idea where your art should be sold. Auction houses are good options, although keep in mind that the auction house will retain a commission for selling your piece. Private collectors and art dealers are also options but finding one suitable will require more research on your part.
Whether you plan to invest for a lifetime purchase or as a portfolio expansion, we hope you follow these guidelines, and enjoy your new artwork!