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Why to invest in Art

Art has been emerging as a new asset class for the well-diversified portfolio. In times of high and rising inflation, art has performed historically well across all market sectors. Typically when there is an uncertain market, collectors look to purchase art with an investment view, not just to purchase beautiful object. The art industry and its surrounding ecosystem play a vital role in improving the country’s cultural value and attractiveness to visitors, while also helping to create individuality in a highly competitive and globalised market.

How to Buy Works of Art

  • Do all your homework on the artist and style you’re targeting.
  • Note the difference between the primary and secondary markets
  • Artwork being sold on the primary market means that it has never been seen or sold before.
  • Secondary market refers to artwork that has been sold before.

  1. Research the Artist

    Generally, an artist with an interesting back story tends to generate more interest among buyers. Consider researching the artist’s age, education, previous exhibitions, and awards.

  2. Research the Artwork

    Before you buy a piece for your collection, a thorough understanding of it is paramount. First on your list should be the question of its authenticity. Proving this is not difficult if the artist is still alive. However, if the artist is deceased, it can be problematic. The best way to protect yourself is to obtain a certificate of authenticity from an expert, preferably the foremost authority on the artist

  3. Investigate the Dealer

    Whenever anyone buys a work of art, the reputation of the source should be open to extreme scrutiny. The confidentiality of the art market can make it very difficult to know the reputation of some dealers and brokers, especially the smaller ones. Researching the reputability of a gallery can be much easier. They feature their top artists, and information on past exhibits can be found on their websites and through word-of- mouth.

Where to Buy Art

In many cases, the question of where to buy art can be as important as how to buy. Would you rather pay a set price, or would you enjoy bidding for a bargain at an auction? Is a small dealer who caters to individual tastes the better choice, or should you browse the galleries? The answers depend on your objectives, and they could make a big difference in price.

Auctions

An auction is an exciting place to be, especially when two or more bidders want the same piece – but make sure not to get caught up in the moment. If you want a piece because you truly love it, a higher price may be justified. However, if you are a collector or investor, be sure to weigh price, value, and condition, and adjust your bid accordingly. Professional art investors try to completely cut out emotion and proceed with a calculating, business-like demeanor. Also, keep in mind that when you purchase art at an auction, the “hammer” price is not the full price you pay. Anywhere between 10% and 30% can be added to your final bid. This is known as a buyer’s premium, and it depends on a variety of factors including price and provenance of the work.

Galleries

Compared to an auction, a gallery is a much more relaxed environment to view, evaluate, and decide on your purchases. The majority do not charge a buyer’s premium, so the amount on the price tag is close to what you eventually pay. Some galleries focus mainly on the primary market, dealing with newer artists. Other galleries tend to focus on the secondary market, reselling artwork without necessarily having any ties to the artists themselves. Many galleries do both. However, you should know what a gallery’s particular slant is before you walk through the doors. Art galleries are also unique in that they frequently work with artists, helping them grow, building up an inventory of their work, and assisting them as they try to realize their potential.

Art Fairs

A fair can be a good place for the novice to develop an eye for art. There is something for everyone, no matter their level of expertise. At art fairs you can browse, mingle with other art lovers, ask questions of the experts, compare prices, and evaluate. And, some of the offerings can rival works sold at the most prestigious galleries and auctions. Find dates for local fairs in the art section of your local newspaper, or search the Internet for calendars.

Online

Aside from the obvious activities such as doing research, viewing gallery websites, and networking with other collectors, artwork is being bought and sold on the Internet in astounding numbers these days. Elimination of the high overhead of galleries and auction houses is an added benefit of purchasing online. As with all Internet activities, make sure a reputable gallery or dealer is behind the website before you click the “buy” button.