Should I Invest in Art in 2023?
Do you love going to art galleries and museums? Enjoy meeting artists and crafts people? Then maybe, you have also thought about collecting art.
Many people view art as a personal passion or just a hobby. But did you know that sometimes art can also be an incredible investment? Yes, that’s true! Artwork can be a long-term investment that can generate outstanding returns over the years, and in the meantime, you also get to enjoy it. But before you get carried away, investing in art is a potential minefield.
We’ve compiled some of the main pros and cons of investing in art. We also share the latest trends in the field.
What are The Pros and Cons of Investing in Art?
The Pros
Not so long ago, we shed some light on how to start an art collection. If you have yet to decide on your first art purchase, you may have some doubts about whether the pros outweigh the cons.
There are many reasons people buy art, and as we’ve said in previous articles, it’s not the best idea to buy it as a pure investment. However, a major pro to having art assets is that their value doesn't rise or fall with the stock market. Art pieces are also rarely affected by general inflation rates.
Art is recognized to be a long-term investment that requires patience from its owner. Many decades, and even generations, can pass before you see a return on your investment, so you should always invest in pieces you love! Diversifying your asset portfolio with art can also be a way to ensure stability, as art is very different from other investment assets.
Buying art gives you a chance to support an artist's spin on the world. What are they saying with their art? Sometimes an artwork is not just a pretty picture or an intriguing sculpture with which to decorate your home, but it may also have a message that resonates with your worldview.
The Cons
The value of a specific artwork often depends on the artist's success over time. Chances are that even if you love a particular piece and believe it to be beautiful, it may not necessarily appreciate in monetary value as the years go by. And art needs to be taken care of and insured. Condition issues always affect the value of an artwork.
Buying art can be expensive, even if you know what you like and where to get it. Galleries and dealers who represent artists are in the business of making money. You may be on friendly terms with them but remember they are there to make money from you. Don’t be fooled by ‘sure things’. No art is a sure thing as an investment.
Art is fashion, and fashions change. One thing seems to be true over the centuries; contemporary art, art being made in your lifetime, is what appreciates over a lifetime. However, the art world is controlled by a few very high-end dealers, gallerists and museums, and unless they are the people advising you, chances are your collection will probably not appreciate the way you want it too.
Lastly, remember to buy what you love. A small percentage of successful artists generate most of the wealth in the art world, and that shouldn't discourage you, but should rather inspire you to seek out art that you love.
How to Find Art That's Worthy of Your Investment
So how do you know what you like?
We suggest that when you start your art-collecting journey, you follow auction houses with specialists who can guide you through choosing the right piece for you. The more you look at art, and the more you read about it, the chance of understanding it rises. Follow our blog to learn more about art. And why auctions and not galleries? Well when you buy at auction this is considered the secondary market where prices are at a fair market value - in other words, cheaper. The primary market is considered retail, and the prices therefore are much higher.
Art Investments Online
When you think of an art auction, you are probably imagining a scene where some exquisitely dressed art connoisseurs gather in a grand room, flicking their wrists with offers for million-dollar paintings. The world of art auctioning is much more diverse these days. Many places, like us at Gray's, do online auctions, reaching a global audience online, and offering a wide array of artworks with varying prices. If you’re not sure where to start, we cover more on how auctions work in a previous blog post.
Are Art Shares a Good Investment?
Art shares are a relatively new concept in the art world, first introduced to the market by financiers and dealers, who were looking to create a commodity to sell, and to earn fees from. Like investing in stocks, buying art shares allows you to own a portion of a particular asset. Art shares are an opportunity if you’ve got money burning a hole in your pocket and you don’t know what you like. So you don't spend money on just one piece but a share of an artwork with a bunch of other ‘owners/investors’. Platforms such as Masterwork allow you to own shares in multiple high-value artworks, and if they are resold at a higher price, you will make money.
Art Dealers Over Instagram?
People also tend to sell artwork in many different ways. The social platform Instagram has been gaining popularity as one of the art world's easiest art marketplaces since the mid-10s. Its usage is no surprise, as more and more people seek to support small creators and find rising artists online.
Today we see the Instagram app offering users more and more consumer-based features such as shops and product displays. However, when talking about the legitimacy of the art you buy online, Instagram may not be the best place to purchase if you want to pursue art as a long-term investment. Again, we suggest you rely on reputable auction houses with proven authority. We love Instagram too, and you can enjoy our witty video takes on art here. Not only are they funny (if we say so ourselves), but there is always something new to discover.
Final Thoughts
The world of art is vast and ever-changing. Investing in art appears to be trending, not only due to our human desire to get rich quick but because art adds a certain magic, or ‘je ne sais quoi’, as the French say, to our lives.
If you are considering starting your art collection, don't think twice and get in touch with our expert team at Gray's. We will use our years of knowledge to guide you through making good choices for your collection. And finally, don't forget to sign up for our newsletter so you can be up to date with our upcoming auctions and read all about interesting artists and under-the-radar artworks.