Tag: Art Investment

Art Investment- Good or Bad!

Jeff A Hardy asked:

You are an admirer of fine arts. Do you collect handicraft, paintings or sculptures or any other artworks just to get an undefined satisfaction or as an investment too? Well, art as an investment has become popular in the recent past. However, there are supporters as well as opponents of the trend who give arguments for and against investing in art.

What’s good in Art Investment

Uncertain stock market returns, interest rates at their lowest in decades, and shaky property market has lead people to find alternative investment options- investing in art is one of them. The rise in demand and consequently in prices, is definitely a good news for people who collect art. Although there’s no certainty that prices will continue to rise, at least art will give pleasure and an emotional dividend by giving the chance to call oneself a collector. From 1875 to 2000, art has outplayed fixed income, but has been defeated by equities. However, in the past 2 years or so, in the wake of stock market losses, art has surpassed equities. Reports say that global art market avoids crash, even in times of economic downturn.

Why Art Investment is Bad

Art market is illiquid. Buying and selling art works is not so easy as the trade shares. Art market is also non-transparent and unregulated. The history of ownership and condition of a piece has to be checked before investing money. Art goes in and out of fashion and the prices may move up and down very quickly. If selling art, one has to pay many taxes. Critics argue that art can’t be considered as financial asset as it disregards traditional benchmarks of financial analysis. Price determination is at the mercy of erratic public taste that follows no financial logic. Works of art don’t generate any income though they lead to storage and associated costs. In short-term, market volatility is relatively high when compared with other classes of asset.

How to do Wise Art Investment

Art investment is risky only if the investment period is too short. Long-term investment, say for 10 years and more, gives good annual average returns. The only prerequisite is to invest in high quality art. It’s better to deal with reputable galleries or dealers and invest in something you like & won’t mind keeping it for a few years, rather than something you don’t like but just want as an investment. If you are a novice collector, gather knowledge and train your eyes by visiting art fairs, galleries and preferably, student shows. Get lots of information from Internet. If that doesn’t suffice, hire independent art advisers for selecting and managing a collection. Some of them work at private banks. Galleries too offer advisory service as a sideline to their main business. If you sell some art works, consult tax advisors about how to save on it. If a couple buys the work, its good to invest in the name of the person in the lower tax bracket. Generate income from artworks by lending them to galleries. UK-based Fine Art Management Services launched Fine Art Fund, a private equity-backed venture aimed at pension funds and university endowments. It hopes to raise $350 inn, locked in for 10 years, to invest in a portfolio of top-quality art. The fund managers are banking on those investors who have seen some of their biggest holdings go down as the value of a quality arts will never go down to zero. Fine Art Fund also plans to solve the problem of lack of dividend income in this type of investment by renting out its art. This can be taken advantage of by wealthy private investors.

Art Investment Guide

The Art Ministry asked:

Art Investment Guide

Second only in size to the US market, The UK art and antiques market is worth well over £4 billion a year, and holds a global share of some 26% of the world’s total art sales. In terms of volume, the UK is the largest marketplace for art on the planet.(1). In 2005, the index covering sales of old masters showed growth of 18.8%, while the similar index covering post-war and contemporary art rose 8.3%. Over the past five years, the average annual returns were 3.1% and 17.7% respectively.(2). That’s a better return than investing in stocks and shares.

Buying art can represent a fantastic long-term investment opportunity. In order to help you make an informed decision on the art you buy through The Art Ministry website, we have put together some key considerations to bear in mind when selecting work from our galleries. With over 25 years’ experience in the art market, our team have followed the same steps to ensure all work available in our Online Store is fairly valued.

1. Buy what you like

It’s important to trust your own taste when buying art. Our aim in providing this collection is to offer artwork for every budget that adds interest to your home or office, a talking point that enriches your environment and lifestyle. Great art needn’t be expensive, and buying artwork should primarily be an expression of your own personality. Like stocks and shares, the value of artwork can go up or down, so it’s crucial you buy what you like and can afford. Ultimately the true value of art is in the pleasure or feelings it evokes. The more people that find it appealing the more demand increases, which inevitably increases the value.

2. Do your homework and understand the value of the work

When you view a piece of artwork to buy, pay attention to detail. If you look into the way it has been physically created, how much time it took and the journey the artist went through in producing the piece, you will come to appreciate the skill of the artist and the effort involved in making the work. When it comes to value, don’t be taken in by the medium either. For example, oil paintings are in general more expensive than watercolours, but the latter can require more skill to achieve the desired impression.

The more artwork you look at and the more background information you obtain on various artists and how they work, the more you will learn what you like and why. Comparing the merits of a work with other artist’s work will help you determine the inherent value in any given piece and assist your buying decision. If you want to know what similar work has sold for, use a source like The Art Sales Index, which has catalogued art prices since the 1950’s, or the Mei/Moses Fine Art Index, which tracks various auction price indexes and compares them to the stock exchange to gauge relative performance.

The comparative merits include:

The artist’s exhibition history

The nationality of the artist

What country the artist works in

The medium the artist uses

The size and dimensions of the piece

The price their work has sold for in the past

3. Buy from a reputable dealer

Only buy artwork from a reputable dealer. The best ones will provide extensive background information on the artists in their portfolio, giving details on how they work and what inspires them. Knowing the artist’s passion might also help you find a work that is right for you. Click here to read ‘About the Artists’ at The Art Ministry.

Reputable dealers will also provide a ‘Certificate of Authenticity’ with all original and limited edition artwork sold. This will be signed by the artist and proves the work is 100% genuine and has been accurately valued. These also include the following information:

The title and visual description of the artwork

Edition numbers and collection details

Materials and techniques used

Size and dimensions of the work

The copyright holder

Distributor details

Release date of the artwork

Printer’s details if relevant

Comments from the artist

Notes on caring for the artwork

Sources:

1. The House of Commons Select Committee on Culture, Media and Sport (Sixth Report)

2. ‘Is it just art, or is it investment?’ by Joe Bolger, Times Online 17th April 2006, quoting figures from the Mei/Moses Fine? Art Index

If you require more assistance with buying art from our website, please to contact us, alternatively, feel free to browse our to view the work of all our artists.

Looking for tips and advice on art and design, visit our blog.

Aboriginal Art – Investment Information

Michiel Van Kets asked:

Australian Aboriginal art has experienced an exceptional increase in popularity over recent years and it’s not just limited to within the home-country. Internationally the art form is recognized as very unique form of art, it is admired overseas and respected by art critics worldwide. Of late, it has also sprung to the attention of not only art investors but also to the wider audience, as wise buyers realize its high potential in the marketplace. As international attention increases and art critics express their respect for Aboriginal works, all kinds of collectors and potential buyers are becoming aware of the solidness of this investment. This art form is described by renowned art critic Robert Hughes as “the world’s last great art movement.”Whilst steeped in what was originally viewed as ethnographic historics, the works produced are very often amazingly modern in design and colour and therefore aesthetically pleasing.

Aboriginal Art is currently seen as the trendiest art scene in Australia, by fat outselling any other type of non-indigenous art and accounting for around 60 percent display rate in renowned Australian Art Galleries. As sales via the major Auction Houses in Australian capital cities will confirm, Aboriginal art is a best seller. As the world is awakening to the unique beauty of Aboriginal Art, prices augment radically. Now it would be a very good time to invest, as prices are considerably rising, and wise investment will definitely guarantee excellent returns.

It is wise to always cautiously investigate before investing in any product and art is no different. Search in reference books, the internet, magazines, Australian public galleries and catalogues from companies like Christie’s and Sotheby’s that arrange auctions of Australian Aboriginal Art. It’s of importance to get acquainted with the artist’s reputation, his community, his productivity and the quality of his work.

Aboriginal art can be a wise investment for the future but one must choose wisely. Works formed by well-known and respected artists has considerably grown in market value considerably over the past few years and can achieve a substantial return if prudently selected. $1,073.600 for Emily Kame Kngwarrey’s “Earth’s Creation” in May 2007 was a couple of months later followed up by a impressive $2.4 million for Clifford Possum Tjapaljarri’s masterpiece “Warlugulong”, auctioned by Sotheby’s to the National Gallery of Australia.

Traditional Aboriginal Art varies widely across Australia making it easy for art investors to assemble a diverse collection. Although the expression of identity and dreams are universal themes within Australian Indigenous Art, designs, materials, prints, and colours wildly differ according to the community an artist belongs to. The desert artists in the main use acrylic medium, in a myriad of colours and techniques. In other areas such as the Kimberley in Western Australia and Arnhem Land in the Northern Territory, natural ochre pigment is used. In this regard, investors should be familiar with the communities and regions where the artists reside, and therefore the style of artwork produced. These are unique and individual artworks created by members of the oldest indigenous culture in the world. As an investor in or a collector of Australian Art, you are assisting in the building of Australian culture and you participate in the world’s oldest continuous cultural tradition.

An investor should thoroughly research the provenance of a work of art. Written documented provenance is paramount. This is normally via a Certificate of Authenticity provided by the seller, guaranteeing that the work is by the stated artist. Further details such as information on the story of the painting, a biography of the artist including their Collections and Exhibitions, the title of the painting, and other achievements normally come with a purchase from a trustworthy seller. Just providing images of the artist executing the artwork and holding the completed work will not prove authenticity, however they are of immense interest and again, the best suppliers of artworks will provide these photographs where it is possible. Reputable sellers will provide a Certificate of Authenticity which is of key importance, sellers often work closely together with the Aboriginal communities and the participating galleries and they should have no problem providing this.

Although the age of the artist is generally of no importance to the value of an artwork, investors have to understand the importance of social hierarchy within the structure of Aboriginal communities. Every member of an Aboriginal society is viewed and respected in regard to his age, status, achievements and who his tribal elders were. All of these aspects, including an artist’s track record and popularity should be taken into account by any investor who obtains to achieve an extensive and diverse portfolio of Australian Aboriginal artworks.

There are various possibilities in order to purchase. It’s of crucial importance that you trust the seller of the artwork in regard to the painting’s provenance before the purchase can proceed. A Seller will most likely be a gallery or an individual art dealer, in either case it is important to meet these people in person and check their references, selling approach and credentials. When purchasing on line, ensure there is a non-conditional money back guarantee if the artwork is not suitable for your needs or does not meet your expectations.

Purchasing directly from the Aboriginal communities might seem to be a good option but does not necessarily guarantee the artwork’s authenticity. Keep in mind, the Aboriginal artworks that have achieved highest prices through major auctions have not been obtained at art centres and provenance from a reputable dealer or gallery is also highly regarded. Here we have possibly the most important consideration of authenticity – the known association of the original purchaser of the artwork with the artist. Be aware of this scenario when assessing the value of works by well-known artists such as Emily Kngwarreye, Rover Thomas, Minnie Pwerle, Clifford Possum Tjapaltjari and Jack Britten.

One of the first considerations you need to do when choosing a painting is that you actually like the painting – you are going to have it on your wall – it should give pleasure to you. It is very fulfilling to invest in a work of art that you genuinely appreciate, especially after all the time and effort spent to learn about the roots and career of a certain Aboriginal artist. Rule of thumb is not to purchase your art quickly – enjoy the research and the knowledge of the artist you have gleaned from your trusted suppliers. In this way, collecting is not merely an investment – it is also a very personal and exhilarating and rewarding experience. Also research the careers of the European Masters – compare them with the Aboriginal artists. See which period of the artist’s career has produced the best and most sought after works. For instance, if one takes a look at an artist such as Van Gogh, ‘The Starry Night’ or ’Sunflowers’ raises far higher prices than many of his other paintings.

Once you are happy that you have found suppliers in whom you have faith, your personal favourite artists, their potential or past achievements such as works hanging in eminent and distinguished art galleries, museums or art collections, then you can be sure you have done your absolute best and you are ready to embark on a successful and rewarding project. Unique, resourceful, intense, and colourful Australian Aboriginal Art can be a magnificent investment that allows you to share and experience the stories and the worldview and of the Australian Indigenous communities. Check online today for a specialist gallery with Aboriginal paintings, artwork and artefacts on display. You will find an absolute mountain of information, and an incredibly comprehensive inventory of art from which to choose.