by D. Weinstein on Thursday, September 11, 2014
In recent years, many people have begun adding art to their investment portfolios. Art has non-monetary value, which makes it an appealing asset, especially during economic hardships. Art auctions for the year 2013 set record breaking sales worldwide, according to Wall Street Journal, with an estimated $12 billion dollars generated. While we are seeing many people lean this direction, the question remains is art a viable investment?
While all art is an investment to the purchaser in some sense, I do not promote purchasing art for the sole purpose of adding it to a portfolio. Investment is a word that makes me uncomfortable, when we are discussing the purchase of art. Of course, art has strong investment potential and the value of pieces fluctuate in our free market economy; however there is no certainty that the piece you have today will produce 20-25% annual gains. I would never make that claim and advise those to be weary of such claims. My advice is to purchase art works that speak to your personal likes and style, and to buy art that is within your budget.
It is imperative when making art purchases, that you first do adequate research on the piece or pieces that you are interested in purchasing. This will help to ensure that you are buying from a reputable dealer and that you are getting a fair price. Too often, I come across buyers who have overpaid by ridiculously enormous amounts of money, for art works that are offered at much better prices from reputable sources. This is a common and unfortunate occurrence at auctions and roadshows. I would advise researching desired art pieces online, prior to attending and committing your purchase from these venues.
Buy from dealers who have a comprehensive understanding of the artist with novice experience in the field. Look for guarantees for best quality and pricing before purchase, and don’t rush your decision. Again, I cannot emphasize enough, purchase art works that speak to your direct passions, likes and style. Do not buy for the sole purpose of adding a potential gain to your investment portfolio. Art is beauty and is meant to be enjoyed by the person purchasing it. Buy within your budget and remember to: ask questions, check authenticity, look for guarantees for best pricing and quality and do your research prior to committing to your purchase.