Art as an Investment
A recent CNN article announced that art as an asset class has been increasingly growing over the last decade. This investment sector can be quite profitable, but it is important to keep several factors in mind before jumping in.
Different Types of Art to Invest In
There are different ways to invest in art. The “safer” way is to invest in blue-chip artists that consistently sell well at galleries and auctions. Think of artists like Pablo Picasso, Andy Warhol, or Jean-Michel Basquiat. These works have established secondary markets and the artists themselves have become household names. While the purchase price will be higher, you can be assured that these pieces will, at the very least, hold their value if not increase in value.
The alternative is investing in younger, trendier artists. The best-case scenario would be for the artist to become very well known, and to sell the piece for much higher than you bought it for.
When investing in art, it is important to observe the current art market trends. Currently, the art market has become more inclusive of previously undervalued black and female artists. Black figural artists such as Barkley Hendricks, Kerry James Marshall, and Kehinde Wiley and female artists such as Joan Mitchell, Yayoi Kusama, and Cecily Brown have only seen their markets and art values grow over the last several years. The growth and support of younger black and female artists helps ensure the longevity and abundance of these artists.
Another sector of art investing is trying to predict the next star of the art world. Ideally, you could buy work from an up and coming artist and then resell the work for a significantly higher amount. There are several factors to be aware of when investing in newer artists.
If the artist does take off, their prices can often increase very quickly only to then sharply fall again. An artist’s market can also cool off if too many of their pieces are in circulation. This is also why an artist’s market and prices can increase after their death, as there are now only a finite number of works available.
The Cost of Investing
You don’t need to have the money to buy a multi-million-dollar Picasso painting in order to invest in art. If you are still wanting to invest a significant amount of money, one could perhaps invest in an artist’s work on paper as opposed to a painting on canvas. For instance, renowned Contemporary artist Sam Francis has paintings that sell for millions, while his drawings instead go for a quarter to a half of a million dollars. While paintings are clearly more highly valued, original drawings from prominent artists will typically hold their value the same way.
It is important to remember that investing in art is not a short-term game. The fluctuation of the art market can mean that some investments will have to wait decades in order to be flipped for a profit. For instance, Damien Hirst’s market continued to surge until about 2008, when his market burst, and his work depreciated in value. This lasted until 2018, when his market reemerged as strong as it was a decade ago.
It is also important to keep in mind that there are costs associated when waiting to resell artwork. Most collectors keep their artwork in secure, temperature-controlled storage. Any damage to the artwork will significantly decrease the value, so it is important to keep art in such a secure and controlled environment. Regardless, you should have your artwork insured, which is an additional cost as well.
Where Can I Pawn or Sell my Artwork?
If you are looking to sell or loan against your fine art, please contact The Loan Companies at our Beverly Hills or New York offices. You can also email us at email@example.com. Additionally, we also purchase and lend against platinum or gold jewelry, signed jewelry, diamonds, fine watches, luxury handbags and sports memorabilia.