The art of investment

Art, wines and cars present a great investment opportunity

There are many people who love to collect things—some collect stamps, while others collect wines, some others collect art. While most people do it out of passion, there is a growing number of people who are collecting such rare items for their financial gains. Yes, collector’s items have a great investment value to them and if you know what to collect, you can make a neat profit out of it.

While you can invest in anything that catches your fancy, the current favourites are art, wines, coins, stamps and vintage cars.

Art

ArtThe top on the list and one that has attracted numerous collectors and investors for centuries is art. The practice of investment in art is quite common around the world. In recent times, many Indians too are foraying into this market.

Why invest in art…

  • The art market is an insulated one, which means that fluctuations in economy, interest rates, inflation, the share market have very little effect on art prices, making it relatively stable.
  • Art will always have value and if chosen correctly, will appreciate with time. In worst case scenario, you can hold on to the paintings, which will give you visual pleasure as well as retain its original price.

How to go about it…

Start with visiting art galleries, exhibitions and auctions. Art worlds have their publications [you’ll find them at an exhibition or a gallery] and websites. Hob-nobbing with fellow art connoisseurs helps you gain important insights into the art world. The artists are present at the exhibitions. Make sure you interact with them to understand what inspired them and hear them talk more about their paintings.

It is not necessary to buy works of only famous artists on order to reap good benefits. At times, it makes more sense to invest in budding artists as you may get their paintings at a cheaper price and if the artist goes on to be successful, the prices of your paintings will soar to astronomical heights.

To decide which painting you should invest in, the most important thing is to like the painting. Unlike other investments, these should offer you visual appeal or else they can become a thorn in the eye.

Once you set your heart on a painting, do a background check about the artist’s profile and his previous works.

Gather opinions of others from the art world about the particular painter—this can definitely earmark your returns.

Consult an art advisor, who too, can be found by word of mouth or through frequent visits to galleries, exhibitions and auctions. Seek their advice before you make an investment since investing in art is not a small deal.

When to sell…

Unlike other investments, art is not a place to make quick money. Also, in case the price doesn’t appreciate, you need to hold on to the investment, sometimes even for decades. There are no fixed returns, but at times, international art index has given returns as high as 30 per cent. On an average, a good investment can earn between 7 – 13 per cent.

To sell, you can talk to an art dealer or a gallery or an auction house.

Magnifying lens over an exclamation markSpot an error in this article? A typo may be? Or an incorrect source? Let us know!

LEAVE A REPLY