04:05
Art investment is a non-liquid, alternative form of investment. It is usually a small part of an investment portfolio. An art investor aims to purchase a piece of art, keep it for years or decades while it appreciates, and sell it years later at a profit. Art has some qualities that other investments do not; for instance, it can be hung on the wall and enjoyed for years. It also does not have to be declared to the government in terms of capital gains when sold by an individual, unlike the sale of stocks and bonds. However, art investment does not necessarily lead to profits, since it depends on constantly changing demands and fashions of the art world. Read more to find out how to become an art investor.
1.Start with some experience or interest in art. The best art investors do their research on the pieces of art that they buy, so someone with some education or interest in the art world is more likely to understand this niche market. As well as personal research, you will need to have contacts with people in the art world, such as auctioneers, gallery directors and dealers, who can give you good investment advice.
2
Understand the difference between art collectors, art investors and art speculators. You may confuse these three terms, if you are not careful. Each of them has a slightly different goal in mind when looking to buy art.
- Art collectors do not buy art for investment purposes. They buy it to decorate and display in their home. Because they consider them to be an important part of their home or life, most art collectors have a hard time parting with pieces of their collection. While many collectors do end up selling some pieces of art, it may be done because of necessity. Collectors often loan their works out to museums and occasionally donate them to museums upon their death.
- Art investors seek to diversify their portfolio with an art investment. Some investment firms put about two and a half to three percent of their investment money in art. They seek good advice and often buy paintings that are older and have been popular historically, such as paintings by the Old Masters. These investments are kept over decades, and sold off when the market is right, with the investor seeking to get a six to ten percent profit rise per year. These investments are also often made to be given as inheritance to future generations of the family. Art investment is often undertaken by the very wealthy.
- Art speculators try to invest in art that they believe will appreciate in value. They aim to buy art at a low price from budding artists in the beginning of their careers. Then they hope to sell their work in 10 to 15 years when the artists are at the peak of their careers and people or collectors are willing to pay much more for their pieces. This is a type of investment that takes intimate involvement with the art world and liquidity in order to buy the art.
3
Figure out what you are willing to pay for art, before going to an auction house. Art investments should be no more than a small part of your investment portfolio, along with stocks, bonds, new businesses and more. Figure out what your range is before you begin to pick out potential pieces, and get advice from investors and art dealers.
No comments
Post a Comment