BUYING CONTEMPORARY ART AS AN INVESTMENT
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Is there a fool proof way of finding a piece of contemporary art which has the potential to go up and up in it's value?
Are contemporary paintings and artworks worthy of your hard-earned cash? Is buying art and paintings as an investment a risky business? Good questions, and the following is a guide only, but it’s up to you to be savvy! However, the quick answer is, if you do your homework, and can spot potential in an unknown artist, and know what you like, then, what you like will probably be liked by future buyers of the piece you have just invested in! But you need to hone your instincts a bit and have the courage to take calculated risks.
Let’s take Francis Bacon as an example. The reaction of art buyers to his work when it first came on the scene was mixed. Writer Wyndham Lewis, even described him as a ‘sinister artist!’ But the Lefevre Gallery, formerly in Bruton Street, London, took a calculated risk and began showing Bacon’s work. They spotted something in him which perhaps, was not immediately apparent to the naked eye. What they spotted was potential, but more particularly, they saw a high degree of commitment in the artist. He wasn’t going to give up painting anytime soon. This obeys the most essential rule of buying paintings as an investment. An artist's commitment means artistic longevity and relevance.
Indeed, this may well be the magical key in being able to assess if a contemporary artist’s work will increase in value. The theory is this: if an artist is committed to keep painting and creating, he or she, will create more works, will seek more exposure, will slowly build a reputation and secure higher prices for their work. This would, therefore, be a good artist to bet on. Conversely, an artist who only does it at weekends, isn’t really giving it their all. And so, they are likely to remain obscure and unknown, and the value of their works as potential investments would be questionable. In fact, in those circumstances it might prove to be a folly to consider buying their paintings at all, but you never know. They might suddenly become popular to future generations, like Freda Kahlo, for example. But hobby artists may not be providing you what you are looking for. In investments terms they are likely to stagnate and their output may even lose value.
If an artist is really into his or her of thing ‘thing’ on an everyday basis and tries to promote what they do and is proactive, then he or she may represent a fair investment opportunity. Of course, this won’t apply to deceased artists, and you might need an expert appraisal in those cases. Then again, you can always Google the name of the unknown dead artist and if there is any information at all, it might be an indicator of a good investment possibility. Some existing biography or notoriety = money! In your quest in buying paintings as an investment, mentions of artists online is a strong pointer.
Obviously a good starting point in your hunt for art investment opportunities are high street antique dealers, second hand shops and auction houses. But as most art lovers and buyers will be aware, summer is the time for exhibitions! So it is also a good time to start building your art investment portfolio! It’s the time of year when budding artists around the globe are putting the finishing touches to their final degree pieces. In Britain, from this year onwards, the Slade School of Fine Art in London and Falmouth University in Cornwall will be running the first of a series of graduation shows, presenting the latest and best student art.
The annual degree shows are a great place to pick up some original artwork which could also turn out to be a fair financial investment. You will also be flexing your sponsorship muscles by encouraging promising young artists with a flash of coin. They, in turn will have an ecstatic fit at having sold something to you! Getting that first sale for them is a vindication of their two years of self-sacrifice at college. It effectively means their art is being taken seriously. They will even be more thrilled to know that you're buying paintings as an investment and consider theirs worthwhile.
We also mustn't leave out the Summer Exhibition at the Royal Academy of Art at Burlington House in London which has a policy of being highly selective. In fact, only one in twenty submissions earn a right to hang on the gallery walls. The problem with this as a source of new art, however, is that prices are at a premium and you may be hard pressed to find a bargain. It is not uncommon to find new art tagged at many tens of thousands of pounds.
But this truly is the age when buying art couldn’t be easier. A whole host of online sites, big and small, selling contemporary art have sprung up. These also include auction houses such as Sotheby’s and Christie’s. An original piece of art can be bought for under a £100. And lots of ordinary folk are doing just that. The advice given by a typical investor is, ‘Start with a piece that you fall in love with and follow your instinct!’
One typical art site owner advises buyers to look for ‘some kind of unique voice or recognisable style’. She says artists who produce ‘work that’s a bit jarring are those that go on to be something special’. Shades of Bacon, eh what! Art can even be bought with interest free loans and returned within 14 days if buyer’s remorse sets in.
But lately the market has become very tooth and claw. Big players like Saatchi Art are upping the stakes. So, what do these guys know that we don’t? Perhaps contemporary art is the new bitcoin with the potential to scale unfathomable monetary heights? They’ll be offering shares next.
However, big or small, site owners do seem to agree that commitment is an important factor in an artist’s brush bundle of abilities, and it helps to talk to artists and their teachers to ascertain this.
The 'best' work sells quickly at graduation shows, so it is a good idea to turn up early. Charles Saatchi, the ad mogul and art collector, sometimes arrives at shows before all the artwork is installed, so keen is he to snap up the good stuff! Investment experts do suggest that modern art is an effective hedge against inflation, especially when the economy is rising. Mr Saatchi is obviously very clued up on this. He clearly knows about buying paintings as an investment.
But unlike shares or property, art is not very liquid and doesn’t produce an instant dividend or income. Art also has to be held for a number of years for it to realise any growth. But it can pay for itself in the meantime by covering cracks in the living room wall!
As of writing, art investments are unregulated, so you can’t get compensation easily if at all, if things go wrong. But forget the money side of all this. Buy because you love the art, and if you do, the chances are, so will others and your investment will not have been in vain! Oh, and don't turn your nose up at freebie art. Grab it if you can!
Good luck!
Below is a link to Christies the famous auctioneers regarding Post-war and Contemporary Art which may be of help:
https://www.christies.com/departments/Post-War-Contemporary-Art-74-1.aspx