From paintings to sculptures and everything in between, investing in art can not only offer you the chance to own something beautiful, but it can also provide you with fantastic returns in the long run.
However, to make money investing in art, as with any financial investment, there are some fundamental things to get right.
We spoke to Steven Sulley, founder and art advisor at Woodbury House, to find out his top tips for first time investors.
Why should people consider investing in art?
“According to Art Market Research, the price of art has risen more than 1,000% over the past 40 years, making it a very attractive investment opportunity.
“Investing in art is no longer an opportunity reserved for the wealthy elite. If you have a keen interest in art, and an investment horizon of 10 years or more, it is something worth considering. Not only can it offer you the chance to own something beautiful, art investment can also provide you with fantastic, long-term returns.”
Why is it important to do your research?
“With so many different variations and formats of art, it can be difficult to know where to start, so carrying out your research before parting with your money is crucial. Better still – find an expert who can help guide you through the process.
“When assessing artwork, there are several factors you should consider which will indicate its future value and help you maximise returns. For example, look at how rare the piece of artwork is, as well as the notoriety or fame of the artist.
“It’s also important to get a feel for the type of artwork you are attracted to and to become as informed as possible about that style. Visit art galleries, carry out your own research and spend time getting to know the market to build up a clear understanding of the different formats, artists and styles that are available.
“You should also deepen your understanding of how auction houses work, as this will give you a feel for the process of investing in art, as well as some background knowledge on the market.”
What is art provenance and why is it important when investing?
“Provenance is documentation of an artwork’s story, ownership history, and accolades. It provides authentication and context that can point to the long-term value of a piece.
“If you visit a good art dealer, they will be able to tell you the exact provenance of a certain artwork, and, before you decide to invest, it’s important to make sure the provenance is legitimate and comes with a certificate of authenticity.”
If someone is new to investing in art, what is the one most important thing you would recommend?
“The world of art investing is very complex, so I would always recommend hiring an art advisor to help you through the process and inform your decision making. Qualified experts can not only help determine if an art investment is worthwhile, but they can also advise you on which artworks are best tailored to you based upon your investment goals. They will also guarantee you have the right insurance and let you know when the right time to sell is.
“A good advisor should always be aware of the latest trends along with possible shifts in the art world, so they can help you identify the pieces that have the potential of delivering the highest returns in years to come.”
What is a common mistake people make when investing in art, which could have an impact on their returns?
“Some people can fall into the trap of rushing into investing because of their love of a specific artist or style, or a sudden increase in an artist’s popularity. Unlike stocks, shares and bonds which fluctuate rapidly in a relatively short space of time, art investments usually require a long-term approach that should not be rushed.
“You must have patience for your investment to pay off and be prepared to hold onto your purchase for as long as it takes to get you the right price it deserves.
“As a rule, you should plan to keep your art for at least 10 to 15 years. This can often discourage people who think their investment will pay off in a couple of years, but even if it may take longer than you would like to see a return, often the more you wait, the higher the value.”
Why is it important to maintain the condition of a piece of art after investing?
“If you have purchased a piece of art with the intention of investment, it is vital you keep it in good condition, as damage can bring down the price of the piece dramatically.
“Educating yourself about how to care for, clean and store your pieces is one of the wisest things you can do.
“Keeping a piece in top condition requires regular maintenance and care. For example, when handling paintings, you should always wear a clean pair of lightweight gloves, and regardless of whether you are leaving an artwork to hang in your home or storing it away, it’s crucial to keep it away from extreme temperatures.
“To protect the value of your investment, ensure you regularly monitor the physical condition of your art and change its environment as needed.”