Investing in Art
The paintbrush is finally wielding a power packed corporate
decision for those in art business. The oil painted canvas
is gracing the well-lit walls of the business entrepreneur,
art investors alongside the art lover’s rich living room.
The transition of a work of fine art from the living room to
a corporate lobby of a multi national company or five star
hotels is finally showing the deep color of money. Investing
in art is the hottest trend prevailing worldwide and turning
into a fine art by itself. In addition, the investment
market has touched the Indian shores and is playing up to
the art galleries in metros like Mumbai, Delhi and
Chennai. With its wide range of ancient, modern
abstracts and contemporary paintings available in mixed
media Indian art itself is finding connoisseurs worldwide.
An eclectic showcase of colorful artworks in pure forms and
in mixed media is currently floating in the market waiting
to become big investments in the near future. Artists, art
dealers and investors all over the world are trying to
cracking the code of the value of priceless masterpieces and
their resale value. Some have become extremely successful in
Is investing in art an ideal business option?
Investing in Art is on the threshold of becoming a sunrise
industry for art dealers. While investment is a heady
decision and buying a painting is choice of the heart it is
not quite clear as of now if an art lover, for the sake of
art would want to resell for a higher price. Until about ten
years ago, art investment was unheard of. Being a niche
investment sector, it cannot become the only way to do
business even though we all know the price of a classic work
of genius will only appreciate not depreciate. It can be a
good deal for the buyer and seller when it fetches the
returns on investment in a big way. Rarely does it happen
that a masterpiece unearthed from an obscure flea market,
sold in an art gallery for cheap is later resold ten times
its value. As in any other business proposition, it is
important to whet the fake from the original, a masterpiece
from mundane, oil painted canvas from an acrylic. In a
digital age when signatures can be easily manipulated there
really exists no manual to tell the dos and don’ts to avoid
fakes, unless one is happy to make startling discoveries!
For an art investor knowledgeable about artists and their
fine works, it may be an emotional trip to own certain
‘artist’s latest painting’. However, for a novice it is
confusing. Newly arrived art lovers need more tips from the
seasoned experts on the art of investing in art! Sometimes
plain common sense helps… for instance if a painting has
taken your fancy get to know the basics:
a.-A profile of the artist and his previous works.
b.-History of the painting that one is interested in.
c.-If the painting is sold in the gallery then a certificate
mentioning the date of painting, acknowledgment of the
artist and authorization of the gallery owner to sell the
painting is required.
d.-If possible check out some more art galleries and more
e.-Sales talk by the gallery is generally to make sure the
buyer will not change his mind. So read in between the sales
talk and then decide.
f.-Get to talk to the artist if possible about the
inspiration to paint it
g.-Resale terms and conditions should be chalked out too if
you wish that the same gallery do the job later.
Will the ‘Art Bubble’ burst?
With the sudden rush of paintings, sold for millions
‘Investing in Art’ seems to have percolated to the level of
those businesspersons who will look at making a quick buck
when they see a bubbling opportunity. In addition, reselling
art is being well established worldwide. As the herd
mentality sets in and takes a toll on the genuine buyers of
art, an intelligent investor will not buckle under pressure
even if the ‘art bubble’ bursts. Any intelligent investment
will go beyond the basics:
a.-If a painting is bought for its resale value then the
investor will see that the painting will have the ability to
stay in its original condition.
b.-Any painting will have resale value if it has the ability
to transcend various trends. In short, it has to be
timeless. A painting of a specific era or topic will be
valuable only until the time the fad lasts. Therefore, it
becomes important for the investor not to rush into a deal
(at an auction or art gallery).
c.-Every painting of importance (especially if the artist is
famous) will be critiqued and given media coverage. It is
better to go beyond the criticism and aesthetics. It is also
important to understand why the painting is drawing so much
attention before cracking the deal.
d.-If a painting is resold for a higher amount, it is likely
to attract attention of tax authorities. Now that VAT (or
service charges) is applicable, calculate the amount to the
basic value and see the worth of the painting.
e.-Investing in art is an emotional decision at one level. A
little consultation, assistance from art friends is
advisable if you are buying several paintings of various
artists to invest in.
f.-All famous artists don’t sell all nor do all budding
painters get their works rejected. A combination works best!
Avoid investing in fake art
To minimize risks of bad investments avoid buying genuine
fake paintings, as reselling them is tough. Like a picture,
a painting speaks a thousand words and makes billions for
the investor. For any painting to command that priceless
ness get adequate knowledge first from the art world. Art
magazines and gallery newsletters, online guidance is some
ways to prepare oneself before investing in art. Gracing the
walls of a corporate foyer or in the privacy of a home,
finally, a painting should give its investor peace of mind
and solace to the heart. Because that is exactly why in the
first place art is invested in-the color of money may or may
not follow! - author N. A.Nagpal