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 this venture.

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 paintings too.
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