Art as an investment

With interest rates at practically zero and traditonal investments like bonds, property and equities at or near all time highs, it is very difficult to find new ways to put money to work.

Art has one benefit over most other investments, in that if nothing else you have something nice to look at – well better than a share or bond certificate anyway. You certainly should not put all your spare cash into artwork, but as a fun, satisfying and possible long term investment there are worse things you can do (like buy wine as an investment for example!).

Booming art market

The global art market is currently booming with annual sales of around £40billion per year, but like all markets it is prone to boom and busts – there was a mini bust in 2008 for example. In financial markets there is some form of regulation (although this has proven to be woefully inadequate and useless in the past) but the artworld is largely unregulated, so as with all things, buyer beware!

Art as an investment

If you want to go for ‘original’ art then go for exactly that, not just cheap reproductions or prints. Everyone is always on the look-out for ‘up-and-coming’ artists but probably 99.9% of those described in this way will never become well known. If the artist is already well known then signed prints could be an option – prints from the artist Banksy seem to have rocketed in value in the last ten years or so, but this is the exception not the rule. The other things about original art from ‘affordable’ (i.e. not very well known) artists is that it has to be a very long term idea and of course should be something that you appreciate and enjoy. In the hope than an original artwork might increase in value is no justification for having something ugly or inappropriate hanging in your home for the next 20 or 30 years.

It makes a lot of sense to collect work from an artists you enjoy, but who are also making a name for themselves. Indications of this (aside from exhibitions at popular galleries) could include a popular website (that ranks highly in Google for search terms like ‘original art for sale’) and the number of Twitter or other social media followers that the artist might have. Similarly contemporary artists that keep getting mentioned in magazines and newspapers could also be genuine contenders for the term ‘up-and’ coming. An easy way to find out is to set up an alert for the artists’ name in Google – you can find out how to do that by clicking here. You will then get email alerts when the artist is mentioned – if you set up alerts for a range of artists you will get a feel for who is most talked about (or is better at PR at any rate!).

Assuming you do not have the spare cash to go to art auctions at Bonhams or Christie’s, then fine your favourite artists from an online searches. Bear in mind that when you view art on a screen the colours can vary from the original – not least because of your screen settings and the fact that the work on screen is back-lit.

Affordable Art Fairs

Another sensible route is to visit an affordable art fair. These are now quite common in UK cities and a quick search online will produce a list of fairs scheduled around the country. A good thing about art fairs is that you can view the art in person and even talk to the artist themselves. This is particularly useful if you intend to collect the work of a small number of artists – you might even get to know them a bit if you keep seeing them at fairs which can have advantages in terms of when they produce new work (you could find your way onto their emailing list perhaps).

Another advantage of original art fairs is that the mark-up on work will likely be less than that of a ‘bricks n mortar’ gallery which will have very high overheads. This is another issue with art investment that perhaps you don’t get with shares or bonds, namely that the spread (the difference between what you can buy or sell at) is huge. On a share this could be as low as .01% but on a piece of art there is no market or official price. In the same way as property is an ‘illiquid’ investment, selling a painting may take months or years to do!

Probably the most sensible advice for investing in art is either don’t (!) or simply buy something you like and are prepared to keep for your own pleasure – a different concept of value rather than just price!