ARTperspective

The Art Perspective blog is a collection of thoughts, musings, and reflections on art, artists, and current happenings in the art world. 

Art as an Investment (part one)

The question of whether or not art is a smart investment is far from new, and equally as difficult to answer today as when it first asked years ago. When I was just starting my art collection one of my mentors said to me, "the only good investments are ones that appreciate in value; real estate and art, invest in both and you'll never go wrong." Generally, I would say his advice is pretty solid, and there is plenty of empirical evidence to validate his counsel. For example, buying a vehicle; while you are gaining an asset, it is a depreciating one. 

I was recently speaking with a collector who had fallen upon a difficult time. He is a specialist in his field, and due to a shift in economy the demand for his particular expertise was at an all time low. For the first few months he relied on savings, and continued to shop his brand locally and nationally, at the six month mark he began to worry about his quickly depleting cash supply, and the lack of work. At eight months, he was forced to make a decision, the decision was to sell some of his assets in order to meet his financial obligations. After a quick inventory he realized that many of his assets would not yield the type of return he needed to make a sale worthwhile. Finally he realized that his art collection may be his saving grace. After reviewing his inventory and having his works appraised he decided to list half his collection on the secondary market for auction. It was difficult for him to see so many pieces he loved being sold, but was relieved that each piece had appreciated in value and he was able to net returns over and above what he paid on nearly every piece. 

Now I am not suggesting you run out and purchase art for investment purchases only (although you could do a lot worse), but return may be a factor you want to consider when acquiring your next piece. Often young collectors tell me they can't afford certain pieces they really like, or it costs too much - but they wouldn't think twice about spending that amount on a vacation, furniture, or a vehicle. The difference in buying art is that it will continue to enrich your life in a way the other purchases can't. Art is personal. When you see a piece of art and have a connection with it, that appreciation often grows over time, you discover new things about the work that you hadn't noticed before, it provides you with an escape right in your own home. 

So next time you come across a work of art that you love, don't let the up front cost be your only deciding factor. Many dealers and galleries are willing to work with you to set up a payment plan, or leasing and other financing options, and when you think about it as an investment, it's an investment in you and your quality of life, not just an asset with a financial benefit.