Art Investing
Art investing is an industry that requires both business expertise and a taste in artistic style. Instead of investing in a piece of real estate or a stock, the investor purchases a piece of art to hold and eventually sell for profit. Unlike other business investments, however, art investing isn't as regulated or exact an industry.
Before a purchase is made in a piece of art, a lot of research should be done. The artist's history, exhibition record and training are some of the most important factors to consider before making a purchase.
An investor not properly researching a piece can essentially mean the difference between a good investment and a profit loss. There are essentially two types of art investors. The first type is only interested in purchasing a piece of art to add to their collection. These investors are usually art lovers and nothing more.
The other type of investor usually buys simply for profit. This type of investor, if not skilled, can be at most risk of losing money. Art speculating, buying a piece on a whim to turn a quick profit, has lost many people lots of money.
Auction houses are usually the site for most art investments. An investor can also visit an exhibit in a gallery to purchase the piece directly. Exhibits are usually more relaxed in atmosphere than auctions. Most auction houses have their own rules and policies for authenticating a piece, placing a piece on auction and making a sale. As mentioned before, researching a piece before buying it is crucial. But also knowing the business practices of the auction house is important.
More important than the differences between auction houses and the popularity of a piece at the moment is the reputation of the pieces' artist. Training, from masterful teachers, degrees from prestigious schools and the selling record of the artist all affect the price and worth of a sale. If an artist, for instance, is trained by a teacher whose work has been highly sought after, chances are the pupils work will be too.
When an investment is made in art, it is important to remember that some factors controlling price are out of the investor's hands. Factors such as the condition of the piece, supply and demand at time of purchase and after and also authenticity can affect pricing. These factors, like all the others, emphasize how important it is to know the difference between a truly good investment and one that looks good on paper.
Many amateur art investors consider first and foremost if an artist is living or passed. The status of life of an artist is important. Since an artist who has passed away obviously can't create new works, and the supply becomes finite increasing demand. However, a living artist, because they are constantly creating new work, the prices for a work can be negotiated.
Investing in art can be a rewarding and enriching experience if enough legwork is done before the purchase. Considerations that should be made before the purchase are artist's history, the authenticity of the piece and also if the artwork fits the buyers personal taste. Since art is very subjective, it's important to know what style of art is most desirable to others as well as the investor themselves.
