If art is your passion and what you truly admire, then investing in this area will do you good. However, you should know that no investment is risk-free, art investment can be quite risky and for sure it needs a lot of research.
We’re about to enter 2023 and art investment and collecting are definitely no longer limited to the wealthy elite. In other words, follow your passion and invest in art! Find something beautiful to hang on the wall. Art investment can look a lot better than just a stock certificate.
So, what are the top tips to invest in art and when should you invest in art?
The answer could be in this article.
Why Invest In Art
"Art can serve as a good hedge against inflation."
Art investment goes beyond just the actual purchase, as it includes art authentication to protect against fraud as well as researching art pieces to determine their baseline appreciation and market value over time.
Let’s check some numbers about art investment to help you make the call! Back in 2014, art sales topped $60 billion in 2014.
According to CNBC, art pieces sold at auction back in 2014 jumped more than 25% to $15.2 billion, with a record 1,679 sales worth $1 million or more. In the first half of 2022, both bonds and stocks were declining and art auctions were setting new record prices! On the other hand, back in 2020, due to the lockdowns because of the COVID-19 pandemic, the art market faced a challenging environment when in-person auctions were canceled.
That resulted in a turnover in contemporary art falling 34% as well as many auctions and galleries that shifted online and which resulted in bouncing back.
In 40 years, we haven’t seen such high inflation rates, and art can serve as a good hedge against inflation. we’ve seen strong rises in auction value during recent high inflation because wealthy people who are looking to buy hard assets such as real estate or art want to protect their wealth.
So, if you decided on investing in art, let me give you some tips that can help you in your first art investment, shall we start?
When to Invest in Art?
"Art deserves a spot in your portfolio."
Investing in art can cost you a lot, however, yes, it deserves a spot in your portfolio.
And definitely, before investing you should know about collecting, investing, and the art market. Is there a certain rule you should follow to invest in art? Well, simply, you can invest in fine art if these cases apply to you:
· If you’re passionate about art and something you truly appreciate and willing to do the required research.
· If you’re willing to own a piece of art indefinitely.
· If you have an established portfolio of other investments and are looking to diversify your assets.
· If you have a high-risk tolerance
· If it’s affordable for you to make the required maintenance and insurance for the pieces that you acquire.
Tips Before You Invest in Art
"Finding and purchasing the right artwork."
Even though investing in art can sound intimidating, the art world is becoming more accessible and we can see that many people are looking to purchase their first original piece of art and begin to build their collections. Finding and purchasing the right artwork can require a lot of work and be overwhelming, so, let me show you these tips to consider:
· Before purchasing, understand your tastes: It’s important to purchase what you’re passionate about, but know that education is also the informer of taste when it comes to art. So, when it comes to deciding to purchase your first artwork, you need to make yourself familiar with mediums, movements, and styles as they will make it easier for you when it comes to investing in your first piece. You can start by browsing art by style to determine what you’re drawn to and don’t forget to discover emerging artists.
· Research is important: So, if you decided on what kind of art or movement you like the most, it is important to do your research, and that way you can be completely sure when it comes to investing. You can start by researching artists who are of particular interest to you.
· Determine your budget: This is something to consider when you’re a new investor, make sure to set a realistic budget and decide on the maximum amount you are willing to spend, by doing so you allow yourself to make the most out of your investment and focus on certain artworks and artists who are within your price range.
· Pay attention to mediums and materials: You need to do so because some artworks may utilize unique or rare materials that will affect the price.
· Attend more auctions: It’s important to familiarize yourself with how auctions work before making your first investment also attending auctions is a perfect way to broaden your artistic appreciation because they give you the chance to know new artists and styles and show you an opportunity to discover a wide range of mediums to suit different budgets and tastes.
· Form relationships with experts: When you create a relationship with experts in the art industry such as collectors, investors, and galleries, this can be a great help for you in the beginning.
Lastly, there is nothing more important than educating yourself to achieve any kind of success as an art investor. Research is the most important thing you can do, followed by learning from the experts could lead you to make the perfect decision.
Do you want to know more about art investment? Wait for our upcoming articles!