Business & Finance Tips

Art experts generally agree that there are two components to investing in art and making a profit. They are artistic taste and business savviness. Following are some tips on how to develop and hone both.

When an Art Investment is Married to Artistic Taste

For true art lovers, investing in art provides a double pleasure. You get to enjoy your investment on a daily basis and realize potential monetary gain. However, if you’re investing to make a profit and not for the sheer pleasure of the art, some general guidelines should be followed. Two of the primary ones follow.

Art Investment Guidelines for Art Lovers

Research: Savvy art lovers do their homework before making an art investment. While you want to visually enjoy your investment, you also want to make sure that it will appreciate in value. Art investments are, by their very nature, mercurial investments.

That is to say, the value of a piece on any given day varies with the normal market pressures of supply and demand. This is in addition to other factors particular to the art industry, eg, condition, age, and provenance of a piece, for example.

Determine Artist Worth: With an art investment, determining an artist’s worth is a key component of assessing the potential value of a piece. You don’t want to overpay. You can get a good idea of an artist’s worth by asking a few basic questions, ie:

Artist sales record: What have the artist’s pieces sold for in the past?

Artist Reviews: What have the reviews in industry-respected trade journals and papers said?

Artist Representation: Is the artist represented by an agent?

All of these are foundational questions that should be asked and answered about the artist of any piece you’re considering purchasing – particularly if you’re assessing it primarily as an art investment.

Art Investment Scams: Business Savviness is a Must

When buying art as an investment, business savviness is a must. This means being aware of the various art investment scams. Following are two that are very common.

Forgeries and Fakes: In art investment, this can come in several different forms. For example, there may be poster fakes sold as original prints, forged signatures and unauthentic titles and other paperwork supporting the provenance of a piece.

Insider Price Inflation: This usually occurs when insiders run up the auction record to artificially hype prices.

If you do proper research, as mentioned above, you will be able to spot many of the common art investment scams easily.

The One Surefire Way to Make Money on Art Investments

Art as an investment is a wonderful way to flex your artistic and financial muscle. And, one of the best ways to do it is to flesh out an unknown, yet rising artist, and invest early.