A few tips for investors investing in contemporary art
First and foremost one should understand that investment in art of any kind is a risky business. Art dealers, auction houses and seasoned art enthusiasts too, at times tend to make mistakes and lose huge amounts on paintings/art they thought was investment grade. At the same time there are times wherein the returns can be exciting and tempting, thus making investment in art a high potential enterprise with risk involved.
Just like with any other investment, nothing can guarantee appreciation or predict depreciation – whether you speak of the share market, real estate art or wine. Yet studies depict art investment favorable when compared to other assets gagged over the period of time.
Here are a few tips below that can help, if you plan to make an investment in contemporary art.
Understand that investment in any form of art can be risky. Gage on this fact before you invest, viewing that investing in contemporary art can be riskier. Ask yourself, Are you prepared to take a risk? Will you be able to handle it? Learn and educate yourself on how to minimize this risk. You can educate yourself by reading art magazines, attending exhibitions, visiting art galleries (Here you can check the biographies of various artists, their profile, the number of exhibitions to their credit, their clients etc.)
Prepare yourself to hold the art you buy for long term gain. With five years being the ideal hold period for contemporary art.
Before you intend to sell, meet with the artist, discuss with fellow collectors, it would even be wise to talk to the gallery where you picked the art from. Remember to take time and go about the right way, this will ensure you a better offer quote.
Make it a point to pick only the art pieces that you would like to view. Surely, every investor wants his/her purchased art piece rise in value, but when you like an art work and treasure it, you will not be holding it, thus helping offset risk involved.