There are many aspects to consider when investing in contemporary art. One of them is deciding whether or not you want to invest in emerging or well-established artists and I would suggest mixing your investment portfolio with both, depending on what risk you want to take. You should find a knowledgeable art dealer (Box Galleries!) who can source artwork in both fields and can give you a well-rounded perspective of the art market landscape.
With a well-established artist, you should look at the presence of a secondary market ie. can the work be re-sold? Your art dealer will be able to give you examples of comparative work at auction houses such as Phillips, Sothebys, Bonhams and Christies. Try to obtain a professional opinion that with well-established artists, despite being internationally acclaimed, their prices still have scope for high returns in years to come.
With emerging artists, we look for unique style, consistency and attributes that make an artist's work instantly recognisable. Is the image consistent with the artist’s style?
As with buying property, patterns of pricing and market conditions are of course relevant and you should always push yourself to buy the best within your budget. Most people will either be inherently risk averse or willing to take the jump naturally but jump as far as you can go for best results!
Buying Originals is always a better investment than buying prints.
Try and make sure that the artist is not prolific and producing lots of similar images and of course do your own research on the artist.
In truth, it is not always easy to quantify what sort of return to expect, and investment returns are more unpredictable at the less established end of the market. Nevertheless, during the past 10 years, the art market has continued to flourish despite the recession. You might see a potential capital growth of around 20% per year and some of the biggest auction sales have consistently happened during this time. A lot of new clients have bought because they feel safer and would rather have their money in artwork that they can enjoy than sitting in a bank. Art really is an asset class that can help you protect and grow your wealth.
We at Box Galleries link up with Private Equity and Asset Finance companies to educate and hold events on art as an investment so that those who may be well-versed in traditional investment assets can learn more on the subject.