Stocks and bonds are usually the first assets that come to mind when you think of investing. However, the stock market is not the only way to make money.

In the art world, classics like Monet and Picasso can sell for millions of dollars. And new artists such as Andy Warhol and Jean-Michael Basquiat sell for tens of thousands and sometimes hundreds of thousands of dollars.

Art is an interesting asset class. Because it is represented by more than a document stating that you own part of a company or owe a certain fixed income. Art is a commodity that can move its buyers like no other.

Investing in artwork, however, requires purchasing artwork that can increase or drop in value.

Investing in art is a risky business. Even “insiders” such as auction houses, art dealers, and seasoned collectors can make mistakes and lose money on art deemed “investment grade.” On the one hand, the returns can be very high, making investing in art a potentially rewarding but risky venture. As with any financial investment, whether it’s stocks, real estate, fine wine, or art, there’s no guarantee that it will appreciate in value.

However, several studies have shown that art investments can perform very favorably compared to other assets over the medium to long term (i.e., 10+ years). Contemporary Art can provide a diversification option in a blended portfolio. For certain customers, it has the added benefit of being a highly portable investment and store of value.

Art investment tips

  • Whether you invest in stocks or art, emerging assets have value. Up-and-coming artists are being discovered in the art world, and if things continue as they are, they have the potential to become big names. This makes artwork potentially a good investment for aspiring players. Browse around a bit to find artists just starting to enter the scene. These artists are just beginning to appear in major galleries. You can also find it by reading art reviews.
  • Educate yourself as much as possible. Read art magazines, go to exhibitions, and meet artists (especially if you want to buy their work). The gallery contains the biographies of the artists. Check out how many shows you’ve done, who you’ve sold to, and what kind of education you received (formal or informal). Check out another reputable online art gallery to get an idea of what the biography has in store.
  • When starting to invest in an industry, it’s important to focus on one area of the industry and become a pro before moving on. The same goes for investing in art. Artwork comes in various genres and periods, each with nuances that can mean the difference between growth and loss for investors.
  • No matter how much research you do, it’s difficult to determine the actual value of an artwork. Seeking the help of a professional known as an art appraiser is one of the best ways to determine how much you should spend on a particularly expensive piece of art. Appraisers can determine whether a work is original, copied, or counterfeit and can offer a fair market value. Getting an appraisal will give you a better understanding of whether the piece is worth the price. You can also negotiate the price of the work you are interested in by using the estimate as a weapon.

Conclusion

Finally, while a familiar name can make you feel like you have an investment guarantee when you look back at art history that often isn’t the case.

Artist and Art his style goes out of style. Buying your favorite work from up-and-coming artists and watching them grow can be a rewarding experience with financial benefits.

 

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