- Rodrigo Méndez
How to start investing in Fine Art
Investing in Fine Art, like any other investment, involves risk and there is no guarantee of a return on your investment. That is why it is always important to do your due diligence and research before making a decision.
However, the art market is becoming more accessible to individual investors, as there are many investment options.
That's why today I want to give you a brief guide on what you must do to start investing in fine art. Take note!
Buy art that you like, catches your attention, and connects with you
Investing in fine art is not just about buying artwork that is financially valuable. Unlike traditional investments, art offers you the opportunity to own unique and valuable work that can appreciate both aesthetically and financially.
Por eso, lo más importante es elegir piezas que te gusten y conecten contigo. Porque cuando compras arte, no solo estás invirtiendo en algo que te hará feliz cada vez que lo veas, sino que también estás invirtiendo en algo que tiene un valor sentimental adicional.
Additionally, choosing pieces you really like can help you make better investment decisions in the long run, as learning to trust your tastes and preferences will give you the knowledge to identify works that are most likely to appreciate in the future.
So the first step to investing in fine art is to find a piece that makes you feel a strong connection.
Research Artists: Established Artists vs. Emerging Artists
Researching artists is essential when investing in art. When you buy a piece of art, you are investing in the artist behind it, as well as in the work itself.
Therefore, I recommend that you investigate established and emerging artists, comparing their careers and styles. This will help you decide which works of art to buy, but you should also know the difference between them. In a future article I will be addressing this topic in more detail, meanwhile keep in mind that:
Works by established artists often have a history of appreciating in value and are considered more secure in investment terms.
On the other hand, investing in emerging artists can be riskier, but offers you greater potential for appreciation in the long run. Because his career and the value of his work are still on the rise.
In addition, when researching artists, consider not only their sales history, but also their artistic proposal, reputation in the art world, and their participation in art fairs and exhibitions. It is also important to consider the historical and cultural context in which the work was created, as this may affect its value and appreciation in the future.
Research the Art Market
A fundamental step to investing in fine art is to research the market. And since art is a global good, you must know both the local and international markets.
Knowing the local art market allows you to understand the trends and preferences of local buyers. It also helps you identify galleries and art fairs that are important in your area.
Also, it's important to be aware of auctions and art sales in your local market, as this will give you an idea of prices and demand.
On the other hand, you should also investigate the international market, as this will help you understand global trends and you will be able to identify the works and artists that are generating interest in the world, which is ideal for obtaining pieces with a high probability of generating good performance.
Determine your Budget
In the world of fine arts, there is the great myth that to invest you need a large amount of money. But this is not so. While there are works of art that sell for millions, there are many others that are more affordable.
It is convenient, as a new art investor, to determine a budget. At this point, you should already have a couple of pieces of art in mind, and based on that you should decide the amount of money you are willing to pay. In addition, determining a budget helps you get the most out of your investment and previous research.
Having clarity on what you are willing to invest, you can focus on the works and artists that are within your budget. But be careful, you should not only consider the money that you will allocate to the purchase of art. There are other associated expenses such as the packaging of the work, transport, and handling. Likewise, taxes can be applied to the purchase of art, especially if you make it outside your country.
Consult with a professional
Once you have everything in order, if you want to receive better guidance, the best thing you can do is seek professional advice.
Art consultants can provide you with valuable information about artists, artworks, and the market in general. They can also help you make smart decisions about where and how to invest.
In addition, good art consultants also know how to establish long-term investment strategies, and can help you diversify your art investment portfolio.
Therefore, they have the possibility to find exclusive investment opportunities and negotiate better prices on the works that you want to buy. And best of all, counseling doesn't have to cost you extra money.
Galleries usually have special prices for consultants and consultants buy on behalf of their clients at full price. That is to say, their profit comes to be the discount that the gallery makes.
Storing and Securing Artwork
This may be an optional step, but I really recommend it. Even more so if the work in which you have invested has a high value. For example, if you buy a Picasso or a Rembrandt, it is clear that you must do it.
Now, if you buy a work from an emerging artist, you can be a little more flexible and consider the monetary value that you have invested. In other words, if the insurance and the protection of the work are very expensive, you can consider not doing it.
But I repeat, it is best to have protection on any investment that you make.
Track and update the value of the artwork and the Artist
This step is essential to maximize the value of your investment in art.
Following the artist's career closely is essential to understanding how his work is evolving and how it is being received by the public and critics. It is essential that you support and promote the career and works of the artist.
In this way, you will be helping to increase the value of their work, something that is convenient for you from any point of view. In addition, you'll also need to keep an eye on their sales history, level of critical acclaim, and overall demand for their work.
But not only that. Future exhibitions, events, or shows where the artist will be performing will also affect the market value of your work. Don't forget to take global economic conditions into account, as this can influence the value of an artist's work.
Finally, remember that investing in fine art can be an exciting and unique opportunity, but to be effective, it requires in-depth research and a strategic approach. By following these steps, you can start taking your first steps in the exciting world of investing in fine art.
In a future article, I will be sharing more about how to research an artist and his work and what points to take into account to know his appreciation potential. So if you found this article useful, I invite you to subscribe to this blog!