Art is a risky investment. Even the “experts”, such as auctions, dealers and collectors to experts make mistakes and sometimes lose money on what they consider to be “investment grade” art. On the other hand, the return can be very large, potentially higher returns by making art on their investment, but a risky business.
Center of the art market investment generally cluster around financial centers like New York and London, and a lot of interest usually focuses on art that respects the principle of “Goldilocks” is in the middle: not too old, it was considered old, which often raises questions about the tradition of participation and falsehood, and not so modern, that there was great auction house.
In this ground, there are a number of factors that can help reduce risk. Artists who have stopped producing (for pure artist who died) is often less risky than those who are alive for the simple reason that the supply of art is well defined (but not perfect because of the possibility of new works that come to light and counterfeiting). Search history auction closes and the home institution, including things like history, exposure, and proof of ownership of an expert and the establishment of marketing (and liquidity), all reduce the risks.
However, being in the middle also means there is high demand and therefore prices can already be high, which reduces the potential for future performance. Given this, a number of galleries have a different approach to art investment, which is to identify the least hit area and emerging contemporary artists who have not yet established a great balance minus the auction houses. As with the world of investment land of art, there is a risk, but there are steps you can take to help reduce these risks. Art galleries have different approaches, although not unique, there are methods that can learn and use that as part of its due diligence process.
Example criteria that can be used, restrictions on the artists backgrounds (for example, have to have a formal education or studied in a particular “school” of art), had a number or type of exposure (such as solo performances and international exhibitions), a history of selling art in one way or another. some inroads into the secondary market, other criteria may include the use of in-house art consultants to review the work to ensure that, with sufficient technical quality and control the size of the offer the artist. If you ask the client list gallery and whether it included high-profile private collectors, this will help you get a sense of ‘reality’ behind the prices quoted by high-profile collectors tend to reflect the value of the labor market.
Among the different approaches is a tendency to be a simple string using techniques to ensure that supply is measured, that art is a quality experience that there is some price increases and there is a some form of secondary market. Whether you buy at auction or through a gallery in the secondary market ask quetions about the criteria used above will help you assess whether your investment in art is more or less likely to make money.
As with all investments, there is no guarantee of appreciation – whether in stocks, property, wine or art. However, several studies have shown that art investment compares favorably with other investment activities in the period in the medium and long term (ie 10 years and over), and that art can provide a versatile mix to the portfolio. For some customers, is a further advantage of being very portable, and that investment in a store of value.
There are a number of tips for investing in modern art found on the Internet. Here are my seven tips to add to the dough:
Make all the investments is the art of risk. Think about it, because contemporary art is even more risky, what level of risk they can handle and what you can do to minimize risk.
Familiarize yourself with as much as possible. Read art magazines, attend shows, meet the artists (especially if you intend to buy for their work). Galleries offer biographies of artists – check how many of these exhibitions, are those who are selling and what training they have received (formal or informal). To get an idea of what you’ve read the biographies of studying other reputable online art gallery.
Art markets tend to be illiquid, so if you want to be prepared to sell if you take your time and do the right thing (talk to other collectors, the artist, the gallery you bought, etc), is likely to get a better price.
Be prepared to hold Art for the long term. Ideally, you should have contemporary art at least 5 years.
Check the levels of supply. The more art is available, the demand is to be the secondary market to be willing to work in your favor if you want to sell your art.
Only buy art that you enjoy viewing and purchase at least part of the joy it gives you and your friends and family. Factor this pleasure that return on investment. Of course, you want to increase the value of art – but if you like, and adds value to your life, would help to offset the risk.
Finally, although the well-known names can make you feel that you have an emotional investment in the guarantee, if you look back at the history of art, often is not: the art of artists and styles, and will be out of fashion. Works of purchase, you will enjoy a future of artists and see them grow up in a financial upside down and have a rewarding experience. To consider as much information as possible and then your instincts, especially if you prefer a work of art.