Thinking of how to invest in art?
You might wonder how to invest in art? Well, the art market has served as one of the hottest investment crazes in recent years. Not only can art brighten your home to deliver immediate value; it can also diversify your portfolio and make your investment strategy more dynamic.
In this guide, we’re going to take you through some of the best practices on how to invest in art so that you can feel confident in buying outstanding art.
Here we go!
Why Invest in Art?
So why do people invest in art, anyway?
Artwork offers different benefits than traditional assets like stocks, bonds, and real estate.
Foremost, art doesn’t depreciate. Unlike most hard assets, art keeps its value—and if you find the right piece—it could be worth far more down the road than when it was originally crafted.
Art also serves a valuable method of diversification. When dealing purely with financial markets, there is always a risk of economic downturn that will affect the value of your assets.
But pieces of art aren’t subject to any stock market or index. The purchase of art quite literally creates a store of value completely separate from economic factors.
Additionally, art brings pleasure into your life while it appreciates.
Looking at the shares in your brokerage account probably doesn’t excite or provoke you. Art, on the other hand, is an asset that you can hang on the wall and display while it gains value.
Risk Considerations of Buying Art
As with any investment, there are some potential risks that you should consider when building your art buying strategy.
Some things to look out for include:
- One sided information channels: Artwork doesn’t have an income statement or P/E ratio. Inside info usually comes exclusively from the seller, and the buyer must take their word for it.
- Illiquid Assets: Art is a long term investment. Turning art around for quick-cash sales is highly unlikely.
- Commissions for Art Dealers: Gallery owners and dealers will happily sell your art collection—but it’s for a price. Some gallery owners charge up to 50% commission for each piece sold.
What Should You Look For in Art?
For the untrained eye, choosing the right piece of art to invest in can be a little tricky. It’s important to do your research.
Originality is the most important factor to consider when evaluating artwork. Every piece of art you buy should match the artist’s original style. If a piece of work seems out of place, you should be wary.
You’ll also want to do some research into the artist’s background. Some questions to ask include:
- Who has this artist trained with?
- What styles do they prefer?
- Where has their art been shown?
As a beginner, it’s important to seek outside opinions from those familiar with the industry. If you don’t know what you’re doing, art sellers may look to manipulate you into paying too much.
You should never buy a piece of art that doesn’t speak to you. As you begin to find your stylistic preferences, you will begin to cultivate a cohesive collection that tells a story.
How to Buy Your First Piece of Art
Before you start investing in art, you’ll need a place to display or store the piece. You should keep art out of direct sunlight and extreme temperatures to ensure that you don’t damage the piece.
Set a budget and stick to it. You don’t want to go all-in on your first purchase. Art investment is a marathon, not a sprint.
There are many platforms for buying art, and you should find the one that best works for you. To get started you can check out:
You should also consider what type of art you want to buy.
Are you looking for renowned historical artists that carry prestige, notoriety, and big price tags?
Blue chip pieces from well-known artists with records of sustainability and profitability?
Work from up-and-coming artists that produce high-quality art at the fraction of the price?
Starting with up-and-coming artists that speak to you is usually a good bet for your first purchase. Because they haven’t yet received widespread recognition for their art, there is potential for big pay off down the road without much risk.
Conclusions: Should You Invest in Art?
If you are looking to diversify your investment portfolio, enjoy your investment while it appreciates, and add a hard asset that won’t lose its value over time, then investing in art is for you.
There are some risks in investing in art, and you should always do extensive research about both the piece and the artist before buying.
Looking for a place to get started?
Gallerima is one of the leading marketplaces for buying art online.
Featuring tons of amazing up-and coming artists, you’re sure to find a piece of art that speaks truly to you, with potential for big pay-offs down the road.
It’s time to dip your toes into the art investing market. Good luck, and have fun in discovering your newest assets!