Smith Partner
04 Aug 2020

Let’s face it, the concept of visiting a contemporary art gallery can feel a little intimidating if it’s your first experience, and considering an investment in the art market can feel like the Davinci Code. Fortunately, there’s no ‘right time’ to begin collecting modern, contemporary, or limited-edition artworks. Existing investors consider the artwork that hangs in their home to be a long-term financial investment. Purchasing art can be a high-reward investment, but there are also risks associated that you should understand.

Purchasing works from artists that are in the beginning phase of their career (referred to as emerging artists) is a great option when your budget is a little thin on the ground. If that artist excels, it’ll result in an increase in value to their artwork, meaning your investment is worth more in the long-term. You should note that there is no guarantee with an investment as its challenging to predict where an artist’s career will take them.

There are a plethora of books and online resources that take a deeper dive into the details of art investment, but we’ve put this short guide together to help you get started.

Much like any sector you can invest in, there are average ideas that should be considered before and during the art investment process. The following guidelines are by no means exhaustive. They are in place to provide a potential investor with an understanding of the industry while sharing some of the factors associated with influences in the art market.

Artwork should represent the artist’s style.

Often, but not always, an artist builds a reputation through the unique style they use with the artworks they create. If an artist strays from their usual style with one of their works, you might purchase the piece at a much lower price, but it could be difficult to resell later. That’s not to say the resale of such an artwork is impossible. You anticipate meeting specific criteria as part of your investment. You’ll want to ensure the highest return for your artwork at the point of sale, and secondly having a stunning addition to your home in the meantime.

Research plus your instinct is the winning formula.

Successful investments are backed up with an awareness of the art market, getting a feel for what’s hot and what’s not. Through analysis, you can prepare yourself with specifics of an art collection, such as the artist’s background, how popular their style is, and how valuable their artwork is. If you dive deeper, you could also research which artists have similar works and get the scoop on everything down to their favourite food! What you should buy and what you think you should buy does not rely on research alone. Going with your gut, combined with detailed analysis, is the winning formula. It’s not uncommon for art consultants to shower their opinion on the investor rather than letting them decide by themselves. Because of this, art collecting is a wise choice for those starting as it allows them to have an unbiased and instinctual decision when proceeding with their investment.
In other words, do your research, trust your instincts when you are ready to add an art piece to your collection.

It is crucial to compare.

Should you find a particular artist’s work that you admire, the likelihood is you’ll feel similar about the rest of their collection, or artists with related works. With this in mind, it is advisable to consider a range of artworks before you settle on a single piece. We advise taking your time before making an informed decision, especially if there’s no artwork that you immediately fall in love with.
There are a wealth of online websites, retailers and auctions that allow you to obtain some exceptional art collections from the comfort of your own home. Today, however, we still believe visiting an art exhibit remains the best way to experience collections as it allows collectors to make the most confident decision on their investment first hand.

Select a credible facilitator for your investment.

During a time where paper transactions were mandatory, before a time where an online platform would suffice to facilitate investments, hard copies of invoices and receipts were entirely necessary. These hard copies were helpful to value the worth of artworks. Without a transparent and traceable route from the owner to the artists, several external factors would make the value of the artwork uncertain. Through the introduction of online investing, the entire process is now more transparent and smoother than ever before.