The Global Art Market is worth over $67.4 billion, and growing. The Indian Art Market has also experienced strong growth, with a growing demand of Modern and Contemporary Indian Art, both at home, and abroad.
This brings forth the question, is investing in art a surefire way to get rich, fast?
Diversifying your portfolio is crucial to building long-term wealth, so as to balance risk. If you want to look beyond stocks, bonds and mutual funds to potentially lucrative alternatives, investing in art may help you in expanding your portfolio horizons. The art market has no relationship with the stock market, the price of an artwork might rise even if the market crashes.
Buying works of art are an attractive investment since it is very clear what you are buying. Unfortunately, myths in investing art have kept the average person away. Investing in art is not solely for the rich. The fears of investing in art can be broken down by research and knowledge.
Even if you purchase some pieces solely to decorate your home, it is profitable to educate yourself.
How to decide what to buy?
Choose what kind of art you would be interested in buying. Art is not only limited to paintings, it includes drawing, digital, photography, mixed media, prints, sculptures, glass-blowing and even video. Pick the niche you love, also keeping in mind the financial aspects of owning art. There are more options you need to look into before investing.
Be aware of the differences between the original piece, and copies. An original work of art is one-of-a-kind, justifying its high value. Copies are also considered a work of art, and may carry value. Prints are a way for those with limited funds to start investing in a new collection. It has to be kept in mind, however, not all prints will appreciate in value. Limited edition prints, or those with the artist’s autograph raises the value of the artwork.
Before starting an art collection, thoroughly research the artist and the artwork.
Does the artist have an agent or a gallery representing them? If the artist has an exclusive representation in a gallery, it indicates that the gallery is interested in the growth and development of the artist’s work. Further research into the gallery is also important. Does the gallery mainly represent emerging artists, or more established ones? Is the gallery committed to the development and growth of the artist? Does the gallery have global or local reach?
Before you buy a piece, thoroughly investigate it’s authenticity. Protect yourself by obtaining a certificate of authenticity by an expert. Getting an appraisal of the piece is the next important step, keeping in mind that the appraisal of a piece may vary, depending on the demand at the time of sale.
Where to buy?
Now that you have an idea of what to buy, the question of where to buy is also of equal importance.
Auctions houses are exciting places to bid for a piece. However, do not get caught up in the moment while bidding. Be sure to weigh the price,condition and value and bid accordingly. Also, keep in mind that the final price includes a buyer’s premium.
Galleries provide a much more relaxed environment to thoroughly evaluate your purchases. Some galleries choose to work in the primary market, working with new artists, and some galleries focus on secondary markets, reselling artwork without having any ties to the artists.
Art fairs can be a great place to develop an eye for art. You can even interact with experts and compare prices of pieces. Art fairs often display works of art which can rival those sold at art galleries and auctions.
Artworks are being sold on the Internet in large numbers. Buying art online eliminates the high overheads of museums and auction houses. Before buying from a website, make sure there is a reputed gallery or museum behind it.
Is Investing in art worth it?
Investing in art has its advantages. Art is, first of all, an asset that can be displayed and appreciated Art being a physical asset, you can control it, without leaving it in the hands of investment firms. If you choose a piece carefully, the value will appreciate steadily, unlike the volatility of the financial markets.
One should also keep in mind the disadvantages. Art is not a liquid asset, so it takes time and effort to get the best price for your piece. Art being a physical asset, needs to be taken care of- the art should be stored and cared for, and must be insured. Most importantly, there is no guarantee that an artwork will appreciate over time. Emerging artists may quickly fall out of favour, so make sure you appreciate every piece in your collection since you may be stuck with them for longer than you anticipated.
All being said, investing in art is not for everyone. It can be lucrative, but a lot of research is imperative to be successful in acquiring artwork that will appreciate in value in the future.