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Investing in Art - Investment or Pleasure

    Mr. Rahul Singh | Wednesday, April 28,2010, 10:34 PM
 

Art investment is similar to investing in anything else. You want to buy at a price lower than the price you sell it. For most people this isn't the primary reason for purchasing a nice piece of artwork, but if you ever change your opinion about that piece you bought, want something new, or simply need a couple extra bucks, selling your investment could be an alternative.

Art and collectibles trading is subject to the same market pressures as other mediums of investment, but there are some big differences. Subjective factors play a key role in the price. These factors includes condition, authenticity, the visual appeal of the work, and even the people who owned the painting prior to you.

But the best kind of investment is one you want to own. You will know more about it, enjoy having it, and are probably more likely to sell it for a higher price upon sale date.

Art of buying Art

Like any investment buying a piece of art is more of an art than science. The biggest challenge is to identify those pieces of artworks that are good, genuine, undervalued and created by painters who have good future. First and foremost the primary reason to purchase art should be for its aesthetic value. If you treat it as an investment, you are bound to go wrong.

To start with one should understand and explore art and subject of art as much as possible. Secondly, buyers should understand whether the style of painting is more of contemporary or classic or universal in appeal. An art investor must also be clear about the horizons and gestation time in purchasing art. The quality of painting, provenance, condition and period of painting are also important considerations. The investment value of art increases due to several reasons. The popularity and history of the artist for one can have huge impact on the work of art.

Dose for investment in art

If a piece of art has caught your fancy, you should know the following facts before you decide to buy it :

  • 1. Profile of the artist and his previous works.
  • 2. History of the painting that one is interested in.
  • 3. 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.
  • 4. If possible check out some more art galleries and more paintings too.
  • 5. 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.
  • 6. Get to talk to the artist if possible about the inspiration to paint it.
  • 7. Resale terms and conditions should be chalked out too if you wish that the same gallery do the job later.

Real life examples

Picasso's "Boy with a Pipe" sold in 1950 for $30,000 and again in 2004 for $104 million.

" A Bold Bluff ", one of two Cassius Marcellus Coolidge's "Dogs Playing Poker" paintings was painted in 1903 and was auctioned off in early 2005 at Doyle New York's annual Dogs in Art auction. Before the auction the senior vice president of Doyle estimated the value of the painting at $30-$50k. The winning bid was $590,400.

The Mei Moses Fine Art Index, put together by the two economists at NYU, shows the paintings in their index outperformed stocks and bonds over the last 130 years.

Taeb Mehta’s Mahishasura fetched a record $1.54 Million at a Christie's auction in New York in 2005. It was bought by an investor of Indian origin based in America. This is the highest-ever amount to be paid for a piece of contemporary Indian art.

Mr. Rahul Singh

Mr. Rahul Singh is a B.Tech (Electronics) fom IIT Roorkee. He did his MBA from Kelly School of Business, Indiana University in 2008. He worked as a developer and a project lead at Support Soft India (Aug 2004-June 2008), a small software firm, where he was instrumental in establishing a critical product vertical within the firm. He also spent two years at Infosys between 2002 and 2004. He also worked as a Business Strategy intern (May 2007-Aug 2007) at Wetpaint.com Inc. in Seattle and gained significant experience in managing strategy and operations at a start-up.

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