Why Art is a Good Investment? How to Invest in Art for Beginners.

In this article we will discuss why art is a good investment and provide some key advice for beginners on how to get started. We’ll also talk about what to look for when buying art and how to
secure the best price.

One of the main reasons why art is a good investment is because it holds its value over time. Unlike stocks or other investments, art does not tend to go up and down in value based on market
fluctuations. The value of investment is independent of most external events and so has a tendency to steadily increase as the years go by.

Although art is considered a reliable long-term asset class, it is also important to know that it is a non-liquid asset which means that it is not something you can quickly exchange for cash. To liquidate your art asset means having an appraisal, working with an auction house or art consultant to find an appropriate buyer all of which can take time. However art is a great investment solution because it diversifies your portfolio. Having a variety of assets in your portfolio helps to minimize risk while adding interest.

Another reason to invest in art is because you have a genuine interest in it . When you invest in
something that you’re passionate about, you’re more likely to do your research and learn about it.

Where to begin?

The first step towards investing in art is to clarify your goal. What are you hoping to get out of this investment? Do you want to make a profit, or are you more interested in collecting art for your own enjoyment? Ideally it should be both, art like any investment cannot guarantee a return, it is therefore important that you are interested in the art you invest in for its own merit as well as its
potential ROI.

Second, you need to do some research, identifying the type of art you might like to invest in. The art world is vast, from 18th century renaissance etchings to contemporary digital installations. It is
important at this stage to really figure out what speaks to you personally, ensuring you have a genuine interest in the type of art you collect.

Doing your own research is inevitable, but eventually you will need to seek an expert who can educate, advise and give you access to certain pieces. The right person will have the experience and knowledge required to help you navigate the art world and find the best pieces to invest in.

Another key factor to consider when investing in art is your budget. Art can be expensive, so it is important that you have a clear idea of how much you are willing to spend. Having done that initial
market research on your own or with a trusted adviser it is important to decide how much you are willing to spend.

When you find a piece you like you should think back to your list of criteria and make sure that the work meets your requirements.

When is the right time to invest in art?

When it comes to contemporary art, the earlier an artist is in their career the more affordable they will be, however they are also a much higher risk investment. These types of artists are often
referred to as ’emerging artists’. Art collectors invest in this type of artist hoping that they will become household names.

If an emerging artist seems high risk, then an ‘established’ or ‘mid-career’ artist is the next option, this type of artist is always bought for a higher price point but is a far less risky investment. They have already asserted themselves in the art world, have had consistent sales at auction houses and are seeing consistent yearly returns on investment.

Finally Blue Chip artists are the biggest names in the art world, they command the highest price points, and so require a hefty upfront investment. The value of blue chip artists however is almost assured, as their works grace the walls of the worlds most prestigious museums.

Originally published in artelier.com

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