While one may think their brand new Jimmy Choo or Limited Edition Michael Jordans are an asset, they’ll have to think again. They may be artistically inspired, but they will yield no profits. We’re referring to art that doubles as an investment as well as décor. Ideally, it should be increasing in value over the years.
Currently, there is a window of opportunity in the art industry. Entrepreneur Magazine reports that “annual sales of contemporary art plunged 75 percent at Sotheby’s and Christie’s evening auctions in 2009, Bloomberg reported, down from $1.97 billion in 2008 and a record $2.4 billion in 2007”. That means contemporary art can be bought at attractive prices. However, every investment requires due diligence before you shell out the dollars to acquire it. Here’s a few things to keep in mind:
• Genuine Interest: It’s pointless to buy a piece of art that you hold absolutely no interest in. Art doesn’t double in worth overnight, meaning that you can expect to hold pieces for years or decades. You’d better at least have a great interest in your art, or you will have truly wasted your money.
• Background Search: If you’re looking to invest in a nice piece of art, you’ll want to conduct some research on the artist, their prior auction prices, demand, and prior shows.
• Attend reputable Auctions: If you’d like your hunt for valuable art to be simpler, consider attending auctions of reputable galleries such Sotheby’s and Christie’s. Reputable auctions won’t bother selling pieces that consist of little value.
• Avoid the Hype: Entrepreneur Magazine reports that galleries can earn up to 50% commission on art sales. Therefore, be wary of any praise that comes from an individual with vested interest in the piece. Also, look for the signs of a bubble. If the artist’s work has tripled in a short amount of time, hold off on buying as the opportunity to buy has passed if their work has gained popularity. Furthermore, you need to make sure the prices can sustain themselves in the way that a classic piece does. So, take your time and don’t be in a rush to buy any art regardless of the fancy bow packaged over it.
*Image courtesy of Artchive.
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