If you want to get started in investment, or you think it’s time to diversify your portfolio, then you might want to consider investing in art.
The fact that your money is going into a creative pursuit means that art investment can seem to have more soul than some of the other options out there – but it’s also a sound financial decision, and one that can be tailored to suit every budget.
As with any investment, the value of art can go down as well as up, so you won’t be able to guarantee a return on your money. But, as long as you are careful to only invest what you can afford, art is a perfectly safe area of investment.
Here are some of the key considerations for those just starting out:
Understand what’s available for your budget
We’ve already mentioned that art investment can be flexible based on your budget – one of the things that makes it a good option for beginners who want to start small. However, you do need to have a proper understanding of what your budget can get you. 10 to 40k would be considered on the lower end of the scale, and with that kind of starting fund you might want to focus on emerging artists; they’re much more affordable than better known names, and still leave plenty of room for growth.
That being said, emerging artists can be a riskier proposition: you don’t know whether their careers are going to peak or plummet. This is why many investors with a higher budget prefer to go for established artists, or a mixture of the two. When considering your budget, don’t forget to factor in additional admin and handling costs.
Arm yourself with art world knowledge
As a beginner, you probably shouldn’t try to go it alone. Consider working with an expert advisor who understands the art world and can help you to gauge the value of a work. There are many different factors that go into the pricing of art, including things such as the reputation of the gallery and whether a particular work is being resold or sold for the first time. A specialist can help you navigate these factors.
All of that being said, we still think that there’s a lot of value in brushing up your own knowledge. Investment can be a lot more rewarding if you understand your portfolio, and a lot of the fun of art investment in particular comes from passion for the work that you’re investing in. Spend time at art galleries, learn about the artists that you’re interested in, and get to grips with some of the technical details – such as how to tell if a piece of work is genuine.
Consider purchasing through shares
We’ve discussed the fact that emerging artists can be more budget friendly, however it’s also fair to say that famous works are a lot more reliable if you want a solid return on investment. These works are known as ‘blue-chip’: art by well-established artists, often household names. Typically, only very rich collectors or investors have been able to benefit from these masterpieces. However an innovative company offering the opportunity to buy shares in blue-chip artwork is looking to change that.
Masterworks buy up quality paintings by exceptional artists such as Andy Warhol and Claude Monet. They then give their investors the opportunity to buy shares in the paintings, in much the same way as you may buy shares in a company. The works are exhibited in their gallery before eventually being sold – and when a profit is made, all of the shareholders can benefit.
If you want the security of investing in art that has guaranteed market interest, but you’re working with a beginner’s budget, then this may well be the way to go. Working with a company like Masterworks also ensures that you’re benefiting from the knowledge of subject-matter experts.
Don’t expect instant results
You need to give your art investment time to mature – this isn’t a way to make a quick buck. Investing is great if you have spare money and you’d like to see it grow over time. If you have time to think carefully about your purchases, nurture your collection and wait for the prices of your pieces to rise, then art investment could be for you.
Waiting for your art to grow in value is a lot easier if you purchase work that means something to you. Whether that means buying shares in a classic piece that you feel connected to or picking up an unknown artwork that catches your eye, the key to successful art investment is to have fun with it. So enjoy!