How to Invest in Art

Updated: Nov 25


Artwork to invest in
Artwork to invest in


There's no doubt that art can be a great investment, and it's growing in popularity. According to the 2022 Global Art Market Report from Art Basel and USB, the global art market reached $65.1 billion in aggregate sales in 2021, up 29% from 2020.


Stocks and bonds are generally the first assets that come to mind when people think about investing. However, the stock market isn’t the only way.


While buying art for your kitchen or living area can be a great way to add color and personality to your space, it also could be a great way of investment.


Art investors tend to diversify themselves in the market. They can buy artworks by relatively unknown, aspiring emerging artists; classics by well-known, or works by artists somewhere in between the two.

For investors looking to preserve their wealth during a volatile economy, art can also act as a hedge against inflation. Because it's a tangible asset, art can perform well during periods of high inflation, and it's not as susceptible to market fluctuations.


To make your money grow alternative investments like fine art are often used as a means of portfolio diversification.

Classics in the art world, like Monets and Picassos, can sell for millions of dollars. Pieces from more recent artists like Andy Warhol and Jean-Michael Basquiat can sell for tens or even hundreds of thousands of dollars.

Art has an impressive growth history. According to CNBC, price appreciation in art has outpaced the S&P 500 over the past 25 years with average annual returns of around 14%, making it a compelling investment opportunity. But how do you get started?

First, we need to know, why some artworks increase in value over time, and other artworks do not carry the same chances of investment,

Here comes the first thing you need to consider which is:


Uniqueness

The demand and supply rules work here too, for artwork with no uniqueness in terms of subjects or colors, or even techniques, chances for it to rise in value are absent, scarcity indeed equals value, and the uniqueness of the artist's style is crucial to limit the supply and create a demand around his artworks.


The uniqueness could be in the story behind the artwork, the technique the artist used (impressionistic style for example), the composition, the message the artist delivers in the artwork, or even the First time to be revealed like Abstractions of Hilma Af Klint.


What was innovative one hundred years ago, of course, is not innovative today, and what was contemporary in the 60s is not contemporary in 2020.


Artist Potential

Do not invest in a new original artwork without having an estimation of the artist's potential, inspect the signature of the artist on the canvas, and in the artist's portfolio you can see the development of the artist's skills through time, does the artist has the potential to rise in value?


The versatility of the artist's portfolio artworks in terms of style (Realism, impressionism, expressionism ….), techniques, and subjects (landscapes, still life, figurative....) indicates the professionalism of the artist, otherwise, the last thing collectors want to do is buying a hobbyist painting.


Quality

in terms of

  • Light and shades

The sensitivity of the artist towards the light and shades is crucial for high-quality visual artwork, painting realism impressionism, or even expressionism, the ability of the artist to work with light and shades indicates professionalism.


  • Color

An artwork will create very different energy depending on whether it contains all one color, a few colors, or many colors. And then the type of energy they emit will depend on what exactly those colors are. For example, a monochromatic painting that contains seven different tints and shades of off-white will look and feel entirely different than a painting that has the same composition but is painted with every color


  • Composition

Composition is the arrangement of elements in a work of art. It’s how the artist arranges shapes, colors, and lines to create a pleasing effect. A good painting composition can make a painting look effortless, while a bad one can make it look chaotic and unappealing.


  • Theme

Gathering all elements together and targeting a homogeneous or heterogeneous emotionally effective artwork, sometimes effective heterogeneous artwork is much harder to reach than homogeneous artwork.


Interpretation and the clarity of the theme to the viewer, Creativity, and originality of the depicted theme, Quality of artistic composition and overall design based on the theme, and Overall impression of the artwork, is the most important factor to consider, to fulfill the evaluation of an oil painting. the painting must be perfect.


Exposure

exposure, essential to deliver the message behind the artwork to people, did the artwork touch the audience? how was the interaction between the viewers and the artwork? audiences' facial expressions when they look at the artwork? does the artwork catch their eyes and hold them?


Value

the value of a piece of art is not only related to the painting quality, but the story behind the artwork is also a crucial subject of value.


Do not forget, Diversifying your investments isn't just about wisely balancing your portfolio between stocks and bonds. Alternative assets such as fine art might have a place in your portfolio as well.






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