Anyone who keeps an eye on the fine art market knows how it continues to expand year after year. We hear about new record sales all the time, and art pieces keep reaching the highest prices ever paid. The market is booming, and savvy investors know how to multiply their profits by choosing the right artists and artworks.
If you’re looking to invest in fine art, you should know it goes far beyond buying the perfect painting for your bedroom and waiting for its value to increase. When an investor adds fine art to their portfolio, it serves as a secure hedge against stock inflation while adding competitive diversification to their investments.
However, many individual investors don’t go for art as an alternative investment asset, thinking it’s reserved only for the ultra-wealthy.
While it’s true not everyone can buy a million-dollar painting, there are still other ways to invest in art and make a profit. Whether it’s fine art photography, fine art prints, or some other form of affordable art to invest in, individual investors can also own a piece of history and see solid investment return over time.
If you’d like to know how to invest in art the right way, you may find this article helpful and informative.
Let’s start with the basics.
Fine Art is a Long-Term Investment
The first thing to know is that profits hardly ever come overnight with art investment. Moreover, experts suggest investors be patient if they want to profit from investing in fine art.
Thinking long-term and being prepared to wait for at least a decade is the key to success regarding art as an asset. Many art investors don’t even plan on profiting from the investments. Instead, they plan to pass on the art pieces to their children and other descendants.
Investing in Fine Art is Risky
Like any other market, the art market gets its ups and downs over time. Every art piece is unique, and it’s often impossible to determine the exact value of each artwork. It depends on many factors like the economy of the country and the artist’s reputation or popularity at a specific time.
Investing in art isn’t exactly like investing in stocks, although both include predictions and taking risks. If you aren’t comfortable assuming risk, investment art for sale may not be your best choice.
The Fine Art Market Has Its Own Set of Rules
The value of artwork doesn’t depend on the rise and decline of the stock market. Even during stock market dropdowns, an art investment may be thriving. A savvy investor knows how diversifying their portfolio minimizes risk, which is why the art market is so attractive to many investment companies and individual investors. Art usually continues to increase in value over time.
How to Invest in Fine Art
The first step towards investing in fine art is deciding how much money you’re willing to spend. You should choose an amount you’d be comfortable to part with in case the artwork of your choosing depreciates over time. Additionally, it would be best to consider the storage and maintenance costs when calculating your investment funds.
Once you’ve determined an amount for your investment, it’s time to start learning about art. The best way to stay on top of fine art trends and value predictions is to learn as much as you can. Learn about artists, artworks, significant periods of their creation, reputable galleries, etc.
Visit the popular local galleries and talk to curators about the pieces they offer – they will be more than happy to give you all the details you need. If you live in a city or near one, you should have a fine selection of art fairs, galleries, and openings to visit. It’s where all the up-and-coming artists display their artwork.
To get a sense of how the art market functions, browse online auction houses and art selling sites. Once you spot a piece or an artist that seems interesting, narrow down your research to find out how much the piece costs. Some apps provide updated pricing information for investors. You may take a photo of the artwork you’ve chosen and send it to them to give you the details.
Your next step should be talking to a professional appraiser to determine the value and quality of the artwork.
Fine art investing comes in two variants:
– Purchase the artwork
– Buy shares in a specific art piece using an online marketplace
The first version costs more, but it also has more potential for large profits once you sell it.
Using an Art Investment Platform
Many pieces of fine art sell online nowadays. Sites like Fine Art America allow you to choose from hundreds of art pieces for investment.
The most important thing to remember when buying art online is to always purchase from reputable sites, legitimate dealers, galleries, or investment firms.
The digital art arena quickly expands and brings more liquidity to the fine art market. You may find digital platforms like Masterworks that allow you to purchase and sell fractional shares of several different artwork types, so you don’t have to put all your eggs in one basket.
The digital era we live in has made it possible for investors to own parts of exquisite art pieces even if they aren’t among the wealthiest individuals out there.
Evaluating Art Investment Opportunities
You don’t need to know the fine art definition to understand how diverse the art market is. Experts emphasize the importance of learning about the artists and their market. They also advise new investors to familiarize themselves with the right ways of managing and storing art pieces.
When an artist catches your eye, it would be best to research them and see the principles on which they’ve grown their brand. It’s also important to know if their growth is sustainable or a one-time exception.
Experts advise investors to look out for art pieces that have been traded at least several times to get their actual value. It also helps understand the exact growth rates of the artwork over time before investing.
The most crucial factor to consider is whether a specific artist is in demand among art collectors. If collectors regularly buy artists’ pieces, it’s a good signal that their artworks will continue increasing in value.
