Did you know that the global art market is worth hundreds of billions of dollars? Investing in art, especially fine art, is a popular method for diversifying one’s portfolio. It also allows you to actually enjoy and show off your investments.
But is investing in fine art a fine investment? Or would you be better off investing elsewhere? That’s a great question, and we have the answer you’re looking for.
So keep on reading, and we’ll take you through everything you need to know about investing in art.
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The Art Market Is Booming
Thanks to a number of factors, including the coronavirus pandemic, the art market has been absolutely booming lately. Classic paintings continue to sell at auction for hundreds of millions of dollars.
As the overall economy remains rocky and it seems like a recession is imminent, wealthy individuals are turning to physical assets like art. While inflation can deteriorate a dollar, you can’t inflate something like a Money or Warhol painting. There’s a limited supply, and this fact helps maintain a minimum price for these works.
NFTs (non-fungible tokens) have also taken the art market by storm and injected a refreshing youthfulness into a sector that’s normally seen as old and out of touch.
How to Invest in Art
If you’re new to investing in art, then you’re probably a bit hesitant. You don’t want to make a bad investment or get ripped.
Appreciating fine art can seem hard enough. But actually paying for it can be a whole other beast. Let’s go over some tips for investing in art below.
Giclées and Paintings
Before you invest in any fine art, you need to understand the difference between an original painting and giclée. An original painting is going to be the most expensive form of a piece of work. It’s the highest quality and was created by the actual artist.
A giclée is going to look very nice and cost a lot less to buy. It’s a print made by a machine. The reproduction is printed on canvas or fine paper with clarity and color that can make it look as good as the original.
However, it’s still just a copy in the end.
A lot of art’s value comes from its originality and rarity. A giclée might come with labels like “archival” or “museum quality.” They can also come with all kinds of fancy certificates that say they’re authentic.
Sadly, giclées are not very respected in the art world and don’t make great investments. But you can even find ways to get more value out of something like a giclée.
For example, if the artist signs the giclée, then the value can go up a lot. It’s rumored that Salvadore Dalí signed tens of thousands of prints at the end of his life as a way to make some easy money.
Another way to boost the value of a giclée is to get a remarque. This is when the artist makes an original drawing in the margins of a giclée.
Posters and Prints
Posters can allow you to hang famous works of art in your home for very little money. However, a poster is not the same as a print.
A fine art print would be something like a block print, lithograph, or hand-pulled silkscreen.
It’s usually pretty easy to tell a poster from a print with the naked eye.
Prints become more valuable the rarer they are. Earlier prints also tend to be more valuable. So print No. 5 of 100 will likely be more valuable than print No. 50 of 100.
Selling the Art Investment
A lot of people who own paintings don’t actually end up selling them later on in life. This means that pricing samples for art can often be skewed.
When you auction off a painting, it’s probably because you think the work is going to fetch a high price. Most art is never resold.
If you have a piece of art in your home that has some real value and you’re ready to sell it, then your best bet to make a lot of money will be to use a fine art auction house. These houses usually charge between five and twenty percent of the sale price for auctioning an artwork.
If you go with a DIY online auction site, then you probably won’t make as much money.
You can also use services from people like Olyvia Kwok to help you make the right decisions with your art.
With all that said, art is a long-term investment. While the art market might be stable or even show big returns during boom times, it can also suffer from economic downturns.
Find New Artists
Everyone wants to find the next Warhol or Basquiat. But it’s easier said than done. You’ll want to check out local museums and find up-and-coming artists who are starting to attract media and critical attention.
Do your research and follow various artists and their careers to make smart decisions.
Should You Be Investing in Art?
As we can see, investing in art can be a smart decision for wealthy people who are looking to diversify their portfolios. But because of how hectic the art market should be, it’s important that you don’t rush into anything and do your research beforehand.
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