Investing In Art

Investing In Art

Article : Ian Tsang          Edited : Konrede Limited           Date : Mar 2020

The global economy is not performing well in these difficult times. Some people are trying to find other ways to invest and trading artwork is one of the options. Investing in art is nothing new. Pope Pius II introduced the first international art trade regulation back in 1464.

Sotheby’s statistics show that since the 1950s, the art market grew consistently and significantly. Interestingly, the art market is very independent. As a matter of fact, it managed to grow during the Great Recession around 2010. According to artprice.com, Hong Kong contributed nearly half of the contemporary art trading in Asia in 2018/19 and became the third largest art market in the world in less than a decade. As a financial and a cultural hub, we have unique advantages for sure. In 2013, introducing Art Basel in Hong Kong also helped significantly.

How would you value a piece of artwork? It can be hard to put a price tag on something that holds sentimental value to us, especially when you are the creator. The same piece is very likely worth differently from you to another person, because our aesthetic value or taste vary.Also, the piece is very often handcrafted and one-of-a-kind. It is the uniqueness of the idea and the creating process which make the piece valuable. There are works which challenge our perception of art, such as Fountain by Duchamp, or more recently, Comedian by Maurizio Cattelan. Some may think these pieces are valuable, others may think they should not be classified as art at all. Financially, Visual Art pieces can be challenging for economists to analyse, because it is less often that an artist sells a piece to the customer directly. The trades often take place between the consumers.

 

Like all investments, there is no guarantee on a return. Its value can rise and fall just like any type of asset. Also, it can take years to make a reasonable profit. We should consider many factors carefully as well, such as who is the artist, type of artwork, art market news and more.More importantly, it is dangerous to follow trends recklessly.

There is so much that can be discussed from finance’s and art’s point of view, because analyses can be very complicated and controversial. Looking at the statistics and past performances, it is fair to say investing in art is a good option because its market is relatively unaffected by the world’s economy. It takes years of experience and a pair of trained eyes as an investor to evaluate the value of an art piece accurately. This is very important if you want to invest in an upcoming artist who has great potentials. And as always, art is subjective. If you are not very familiar with investing artworks, it is better to seek advice from a reputable art advisor.