Investment: The art of the matter

There was a time when a painting was only bought to match the colours of the drawing room. It was a showpiece and not a very expensive one at that. But in recent times a concept that is gaining popularity is investment in art. Artists like M.F. Hussein and Anjolie Ela Menon have done a lot to popularise art in India and abroad. Their works have fetched and continue to fetch, exorbitant prices at various auction houses.

The past 50 years have seen a great surge in the market for artwork pieces. Sotheby’s recently sold works by Indian painters worth 4.290 million pounds. Amongst them were ‘The Red Road’ by F.N. Souza and ‘Death Scene’ by Rabindranath Tagore.

Gone are the days when purchasing pieces of art was the prerogative of the elite, when it was a statement of your status to hang a ‘Hussein’ in your drawing room. Today many people buy paintings for profit and not necessarily for the love of the art.

As Aditi Khurana, Manager, Palette Art Gallery puts it, “Art as an investment is quite addictive, not unlike stocks and shares. The prices of a young artist do not fluctuate but are always on a rise. On the other hand, one should not just buy art for investment. It is something one has to live with so one should have a connection with the artwork before finally deciding to buy it.”

Appreciating art

However art, like any other investment, requires knowledge and expertise. Do you purchase a house worth millions just by looking at it? No! You inquire about the house, find out about the value of the locality, talk to its previous owners, inspect the original papers and bargain about the price.

The same can be said for an investment in artwork. It is very important to find out all about the painting and the artist. Before putting your hard earned money into buying a painting, it is imperative to collect all the relevant information. There are many courses run by galleries to help the layman appreciate fine art. National Museum in Delhi offers a six month course in art appreciation. You don’t require to have a degree in art; what you do require is an appreciation for art, the willingness to research and the aptitude to learn a few tricks to authenticate the artwork. Armed with these, you can evaluate any type of work.

The risks

Like any investment, art has its risks too. However, this addictive hobby varies from the other investments like shares and stocks in one area—the price of a piece of art by a budding artist does not rise and fall steeply, usually it shows a steady rise.

Before purchasing a work of art for investment, a buyer should carefully examine a few things.

Selection

Choose the painting you wish to buy with care; look around various galleries. There is a lot of information on the internet too, so do your research carefully. However, never buy a painting just for its monetary value. Stocks and bonds can be locked off in the safe, but you might have to live with looking at the painting daily. So buy only something that appeals to your senses.

Details of the artist

The first and foremost thing to consider is the profile of the artist. Find out about the background, the main concept of their works and the general response to their artwork. Gather information like the names of the collectors [public, private or corporate] who own the artist’s work. Also find out about publications mentioning the artist and honours received by the artist help the buyer. Look for the galleries patronising the artist and get data regarding the past and future exhibitions of their works. Awards, influential collectors and honourable mentions in international and national journals add to the importance of the artist.

Obtaining the artwork

It is very easy to be conned by unscrupulous dealers. Buyers should therefore ascertain the provenance of the painting before parting with their money.

“One should always ask for an authenticity certificate from the gallery as well as from the artist to ensure an original piece of art work. The certificate should have the image of the art work, the size, medium and year it was made, along with the signatures of the artist,” cautions Aditi. Specifically, enquire whether the art is original or if it has been reproduced by mechanical means. There are a lot of limited edition ‘works of art’ that are little more than digital or photographic copies of originals, that are produced not by the artists who sign them, but by commercial publishing companies. Many signed serigraphs, lithographs and giclees prints are, in fact, not originals. Keep in mind that the reproductions are not as valuable as originals.

Purchasing process

After you have obtained information about the galleries displaying the works of your chosen artist, observe the paintings intently to make your selection. Find out about the availability of the artwork and the price. The art market isn’t a bazaar, so do not try to haggle over the price. However, some artists do offer their older works at a discount.

When you are investing money, it is important to get a fair price. Of course the gallery owner will argue that an original piece is worth all the money they’ve asked for. As a buyer, it is important that you find out if the pricing is fair. The list of prices of various paintings is published in art price guides, gallery catalogues and sometimes in online databases. Look for the cost of a similar painting to get an idea. This information is available in the art department of major public libraries and with the galleries.

Ask the gallery owner for the sale records of similar paintings by the same artist. Compare prices across galleries to get a good bargain. While researching the price, if the records show a steady increase in the cost of the painting, you have a good buy.

If putting so much effort into buying one painting seems tedious, seasoned collectors will tell you that the journey is as interesting as the end. Collectors enjoy the process of researching the history, importance and origins of a piece of art. With time, experienced collectors are able to dig out all the information very swiftly. But to succeed in this field you must have a deep love and sensibility for art. If it is something that you are passionate about and will work at, it will be just a matter of time before you become a seasoned collector.

This was first published in the June 2014 issue of Complete Wellbeing.