It is geared towards art collectors, patrons, connoisseurs, professionals, investors and all others, those seeking the tools to appreciate and understand investment in the art world; here it is being provided basic inroads to understand and to appreciate complex and divergent issues and aspects surrounding the development of contemporary art, and insights into the world of investing in art for beginners.
It is simple, really very simple investing in art for beginners and enjoy till it’s getting its new home. If you are having a clear mind to support artists presently and to get good rewards after few years, please invest in Arts. There are certain issues you should take care about, and we will have a glimpse of them. Here are the insights with my own observations after some research:
Contemporary art – which formulates most of the eye catchers these days – remains the most volatile and unpredictable market. It is also, therefore, the one offering the top rewards, so long, as expert says “Buy wisely, Sell wisely, and take care regarding Authentication.”
The fluctuations in the art market for one artist can and often will concern the market for another, related artist. Knowledge of art movements and art history can help you better understand these correlations and connections.
For the last reason, diversification is the key point in investing in art for beginners; you should have a multi-various collection of Paintings as well as Sculptures and other Art works. An addition of some authentic precious craft can give you a further strength to your collection. Diversification does mean moving beyond fine art into decorative art too.
Always buy the best and second best you can afford – and to do so, it requires understanding and a certain amount of proficiency in the artist’s oeuvre. Try to find a very good art advisor/appreciator – by “good” I mean not only “knowledgeable,” but also “Good to you” and one you trust. Better to buy the best of a young artist than an inferior of some established one, for example, the first is far more likely to be liquid than the later and will appreciate more over time.
Look at out for good bargains is another key point in investing in art for beginners. If an art-work fails to sell at auction (or at successive art fairs), the market will consider it “burned” and hence, illiquid. This will leave the door open to purchase at a reduced price – but prepare yourself to hold it for a while before you can return it to the market. Even then, most collectors will have access to the records of its sales history, making it tricky to fetch a significant profit. You may try to resell after few couple of years. Surely you will be able to attain a fair market value for the work.
It’s understandable in investing in art for beginners: buy low, sell high. As all other commodities, the art market can turn on a low, and some specific artists can go in and out in this phase. Like this, the art market generally works. The issue is if it is a localized market then it is unlikely to recover for the down-stream artists.
No, it’s a question that how to deal with local or nation-based art movements. My own feeling and understanding at the moment lie with new art coming out from the middle aged artists both in abstract and semi realistic segment. It’s also a boom for the artists from the Middle East and Muslim countries, particularly in the form of miniatures and lower sized ones. It’s sounding like a financial analyst, but this is the ‘Emerging markets’ surely can be considered as serious investments. In any scale, the constitution of ‘optimal baskets’ requires real understanding of markets in order to best manage financial and operational risks and profit making.
Now it is an understanding, not an advice, I’m not very confirmed and do not even strongly agree with the term “emerging markets” in this regard, especially in the case of Middle Eastern / Islamic contemporary art, as I have called it previously, but it’s a trend in current international exhibitions and art dealings. A collector can accept it not as a market that’s emerging, in fact, but our discovery of it. Great art is great art – no doubt about it.
There is always an issue in primary markets while investing in art for beginners – ‘Buying new art by young upcoming artists’. In one sense, this can be the risk-taking affair but the vast majority of these artists never really make it. But many will. While the chances of your own discovery of a new artist will prove financially rewarding may be smaller than the chance of an increase in value of an establish artist’s work, the cost of a work by a young artist is also a small fraction of the cost of said great art work created by the established one; in other words, you are essentially buying low.
More than perhaps anything else – connoisseurship, study, visiting galleries, exhibitions, art fairs and museums gives you a great pleasure, it’s not work for the pure investor, but it can develop into a great hobby. It would give you a different feeling and understanding about the aesthetics, culture and the flavor of art.
The famous Art Journalist Daniel Grant once wrote an interesting paragraph in his famous article named “Secrets of the Art Market”: ‘George Akerlof, who won the Nobel Prize for economics in 2001 for his research into asymmetric information and teaches at the University of California at Berkeley, called the buying and selling of art “a rather open market.” However, for those who are unaware of available information and where to obtain reliable advice on how to maneuver in this realm, the art market may be an example of Bad Capitalism. Capitalism is great at producing what people want. However, many buyers may not know what they want or are willing to pay for something. If buyers are willing to pay more than a picture is worth, then capitalism will create institutions that take advantage of them — that is, galleries and auction houses.’
In Conclusion to the discussion on investing in art for beginners, one can always “Invest self-assuredly in art, because Paintings and Sculptures will never be bankrupt”. My personal opinion is: If you love it, buy it. If you decide well, one day you will be able to sell it for a good profit. And if you choose really well, you won’t want to.