Art as an Investment
Art goes beyond beautifying a space; in recent years we see the Art market becoming a popular investment option. That means purchasing Art can not only enhance your home’s décor, but it can also appreciate in value simply by hanging on your living space, and a sound choice to diversify your portfolio.
There are many ways to diversify your portfolio – some prefer to invest their money in rare coins, stamps, cars, jewellery, or bottles of fine wine. An investment class that is quickly becoming a top choice is Art.
Read about Fine Art.
WHY INVEST IN ART?
Looking at the most recent art market report published by The UBS and Art Basel Report for 2020, we can see that the sales on the global scale reached as much as $64.1 billion in the year 2019. That’s a lot of money going into Art, so the question is why?
Here are a few reasons why people are choosing to invest in Art, and why you should too:
Art is a long-term investment
Although profits from Art do not happen overnight, it is a good long term investment for patient investors with a time window of 10 years or more (the longer the better!). This is because unlike houses or cars, Art does not depreciate. A 500-year old piece of Art is more valuable today compared to when it was commissioned all those years ago.
The art market is not affected by the stock market
The value of Art does not rise nor decline with the stock market; it will continue to appreciate in value over time. Because of this, Art becomes a good way to diversify assets. By buying Art, you can create a store of value completely separate from the stock market.
Art is an aesthetically pleasing asset
Art is an asset you can display on your living space while it appreciates in value. Investing in a piece of Art may not immediately yield income, but your dividend will be the complete satisfaction of owning it.
Art is an emotional investment
Buying Art is a financial decision as much as it’s an emotional one. Once you find that piece that speaks to you on a personal and deep emotional level, it makes purchasing your piece all worth it.
WHAT ARE THE DIFFERENT FORMS OF ART?
The Art world is broad; therefore, to prevent you from feeling overwhelmed, I recommend to narrow down your search by picking a style, genre or time period that interests you.
Once you’ve found your area of focus, find a piece that will connect with you. There are different forms of Art, I’m naming a few of the most popular ones below:
Paintings are two-dimensional pieces made up of layers of pigments applied on a surface. It is one of the oldest and most common forms of Art.
Sculptures on the other hand are three dimensional pieces traditionally made through carving (the removal of material) and modelling (the addition of material) to create a piece.
Prints, just like paintings, are two-dimensional pieces. They are made through a method of transferring from one surface to another. As a rule, rarer prints such as Limited Edition (LO) are more valuable than Open Edition (OE) that can have an endless number of copies.
Read about the difference of Limited Edition and Open Edition Prints.
WHERE TO LOOK FOR ART?
With modern technology, looking for Art has become easier than ever. With just a few clicks, you can purchase your Art piece in a matter of seconds, and have it delivered to your doorstep in just a few days. Of course, there are more conventional ways to view or acquire Art such as galleries or auctions. Either way is good.
Here are four of the most common places to look for Art:
An auction is an exciting place to be, especially for seasoned collectors and investors. The excitement is fuelled when two or more bidders want the same piece. While at an auction, I recommend not to get caught up in the moment. Be sure to carefully weigh the price, value, and condition of the piece, and adjust your bid accordingly.
Compared to an auction, a gallery is a much more relaxed environment to view, evaluate, and decide on an Art piece you’re eyeing to purchase. What’s great about galleries is they usually have Art Consultants who can help you out if you have any questions.
An art fair is a great place to browse and mingle with other art lovers, compare prices, and evaluate Art pieces.
With technology in play, artworks are being bought and sold on the internet in astounding numbers. As with all internet activities, make sure the website is secure before you click the “buy” button.
HOW TO INVEST IN ART?
Before buying Art, you’ll need a place to display or store it. Art does not depreciate, but it can become damaged if handled improperly. The best place to display Art is away from direct sunlight and extreme temperatures. Secure this safe location first before proceeding to the next step.
Once you have a dedicated space for your Art piece, it’s time to set a budget and commit to it.
With a set budget in place, it is then time to do your research. A few research topics to consider would be the different forms, genres, or time periods. Conducting a thorough research would help you identify what would suit your personal style best.
The most exciting part would be finding your Art piece (see above: Where to look for art), and bringing it home. Don’t’ forget to maintain and practice good care & handling to prevent damage.
SHOULD I INVEST IN ART?
At the end of the day, this question really depends on your personal investment goals. If you are enthusiastic about Art, then adding Art to your portfolio can be an exciting way to diversify assets. With an eye for Art and willingness to take a little risk, you will find Art as in investment to be incredibly rewarding.
Feel free to reach out to us at Matt Jacob Photography if you would like to ask questions about the value of photographic prints and why this type of Fine Art can be rewarding, not just at a sentimental level. If you already own some photographic Art and would like to know more about how to take care of it so that it not only lasts a long time, but retains and/or appreciates in value over time, see Matt’s Care and Guidelines article or just send us a message!