Whether you’re a new investor or an experienced one, you may share this common belief that investing in art is impossible unless you are wealthy. Most individuals think that millionaires are the only ones who can access art investments – especially with how expensive certain art pieces can be. But that’s not true – art can be accessible to anyone.
Over the last few years, art has turned into a popular type of asset. The reason is that art can serve as a good hedge against inflation as it’s a tangible asset. During volatile periods, art can be more stable and offer some diversification, as its value isn’t affected by the performance of the stock market.
People think of art investments as something that involves the purchase of a pretty and expensive piece that they hang on their walls for more style. But there are different other ways to buy art. For example, nowadays, non-fungible tokens or NFTs shifted the way we can invest in art, giving us access to these assets even if we’re not super-rich.
So, if you want to become an art investor, here’s everything you need to know.
Best fine art investment
By investing in fine art, you will make a good long-term investment. And while fine art can be a great opportunity for investors who want to diversify their portfolio and make a profit in the future, it has a drawback – it is mostly illiquid and very complex. For this reason, investors must know exactly what they’re buying.
For example, you can walk into an art gallery and see an exceptional piece of art selling for $100,000. However, if the price is too high, you probably hesitate to invest. Therefore, the owner of the gallery might present you with works from the same artist that sell for lower prices – $500 or $1,000. They might also mention that these pieces are giclées, which are fine paper or canvas reproductions of the original work.
While purchasing a copy of a fine art piece is tempting, it is the rarity of the original piece that makes it so valuable. This is a mistake that many novice investors can make when they want to become art investors – they will be convinced by the “museum quality” and “authenticity certificate” claims made by the owner and invest in something that doesn’t provide a lot of value in the long term. No matter how good the copy looks, its value will never be the same as the original.
You can find posters and prints all over the world, but there will only be one original piece and that is the most valuable.
Cruise auctions can be a great way to find some fine art pieces. But while it’s possible to find genuine art at these auctions, it’s not always rare and valuable. Nowadays, some of the best fine art investments are made on special, dedicated platforms.
If you want to make an investment that will bring you a profit in the future, go for blue-chip art. This includes popular artists like Claude Monet, Jean-Michel Basquiat, and Pablo Picasso.
Investment art for sale
If you want to invest in fine art, then you must go to art galleries that sell artists’ work, commission art from an artist, or reach out to the artist directly regarding specific pieces. It’s also possible to go to art fairs or join online auctions. Art share investments can also be made online using special platforms.
What’s great is that there are different forms of art you can invest in. Paintings are the most popular form. Valuable pieces can be sold for millions of dollars. For instance, in 2022, Pablo Picasso’s Femme nue couchée from 1932 was sold for $76.5 million.
Investors can also invest in street art, photographs, NFTs, and other forms of contemporary art, such as sculptures, performances, video art, and more.
Art investments can provide great long-term value. After you purchase the piece of art, you can sell it at fine art auction houses. Not all investors end up selling their investments, and when an art piece makes it to an auction, it happens because the owner believes someone will buy it at a generous price.
Remember that if you sell your art investment at an auction house, you can expect the house to charge you between 5% and 25% of the sale price. But if you don’t want to deal with this fee, you can pick Internet auction sites instead.
Art investments can crash during recession times and can provide great returns during periods of market growth.
What is an art investor?
An art investor is a person who purchases pieces of art at a certain price, planning to sell them in the future to make a profit. It’s not easy to become an art investor, as it takes time, dedication, and knowledge. Someone who plans on becoming an art investor must study the world of art and learn the basic vocabulary of the field. They must recognize major trends, and categories, and notice when the art market is profitable.
Most of the time, an art investor can focus on one medium, art history period, or genre, but they can also be interested in more of these categories. Once an investor learns how to find valuable fine art pieces, it’s going to be easier to invest in the right works and make a profit.
Art investors are aware that while art investments can be profitable, it may take some time until they can make some money. This is because:
Investors Must Hold the Art for Some Time
The art market is not exactly liquid. So, even if you buy an art piece whose value will increase, you’ll have to wait until you’re able to sell it. Besides, liquidating your holdings to cash in on the investment can lead to fees to auction houses or brokers.
Investors Must Decide on an Artist
If you’re not going for blue-chip artists, choosing a contemporary artist can be challenging. This is because it takes time for someone to get a reputation in the art industry. Until then, they cannot charge high prices for their art. On top of that, the unspoken rule is that art from deceased popular artists is usually more valuable than art from living artists. That’s because the former is in higher demand, but it’s rare – so, its value increases.
How can I become an Art Investor?
If you want to become an art investor, you must be prepared for a lengthy process. However, if you learn how to make the right art investments, everything will pay off.
- Studying Art
The first step in your journey of becoming an art investor is to become familiar with the art field’s vocabulary. This means that you must learn all the different terms, art movements, and other aspects of the art world.
A great way to study everything is to read books, access art criticism websites, and subscribe to famous art publications. You can also focus on a particular art genre or medium and attend different criticism classes.
- Finding Your Strategy
You must develop an investment strategy to help you get high returns. Think about why you want to become an art investor, and what you plan for the long term.
You should also settle for a market that makes it easy for you to buy and sell in. It should also allow you to find famous artists with works of increasing value, and even search for artists that are not that popular but have great potential.
- Buying and Selling Investments
Art investments can be made by attending art galleries and auctions and forming relationships with artists and dealers.
There are different ways to invest in art. You can go for an art fund, invest in physical artwork, invest in fractional shares, or in NFT art.
The Bottom Line
Investing in art can bring you a great profit in the long run. Whether you decide to buy an entire art piece or make fractional share investments, you can make a good long-term decision based on the rarity and value of the art you buy.
If you want to invest in art, you can use a platform like Investables and choose the right artwork for your portfolio. These physical assets can increase in value and bring money in the future.