There are many philosophical discussions about whether to collect art or invest in it. To decide, first identify what you value most from collecting an art piece. If you value the artist’s profound meaning and form for its own sake, invest in it. However, if you want a significant artistic experience whenever possible and you are willing to spend the time and money to collect artwork each month, then go with collecting the artwork itself.
On one hand, having an artist solely create your work makes you feel close to them, like they have made your dream come true. On the other, you might feel that their output is not worth paying for because that artist hasn’t created any new work in quite some time. Which one is better for you? At first glance, it seems as though investing in art would be better; however, some artists wouldn’t willingly spend a lot of time on a project without immediate payment
The Difference Between Collecting an Artist’s Work and Investing in Art
Art is something that has been passed down through the ages, in one way or another. Collecting any kind of piece means that you are buying AND owning a piece of worth. On the flip side, investing means purchasing artwork for the capital gain which profits will be made on them through selling or trading over time.
Sometimes people may be confused about which type of art they are investing in when they buy an artist’s work. This can create confusion because many artists will tell you to invest in their work, as it has a long-term potential that is worth the money. In reality, you can also acquire an artist’s work by just buying one of their pieces, but these come with higher risks such as not being able to recoup your investment and their longevity ultimately coming down to luck rather than foresight.
What Are Art Investments?
Collecting an artist’s work is often the easier option, but investing in art can be very rewarding in the long-run. If you know an artist that you believe will be respected in their field, do what StylishPro does and invest in their future.
Parallel to the rise in popularity of investing and companies, there has been a rise in mutual bond funds collecting artwork as part of their investment portfolio. These bonds are publicly traded investments that work just like stocks and are valuable due to the rarity of these pieces today. Focusing on “investing in art” investors can become passionate collectors or give them a new way to diversify their monetary portfolio.
Collectors buy artwork because they simply like the artwork, or it reminds them of a time they went to a museum or saw it on TV. More specifically, collectors purchase artwork in order to own a piece of art that is original and valuable. An example would be buying an original Ruben that might cost more than $10 million as opposed to purchasing a reproduction from eBay for $800. An investor invests in an artist’s work because when the artist sells their work, the investor will make money trading in the original for a new one. If a collector buys an expensive piece of art and the artist then gets rid of the old one and makes more money off of it (through resale), then down time determined by waiting for the next sale would have actually decreased profit margins.
Why are some investments more inherent to the art world than others?
The difference between the way an artist approaches selling their work and investing in art comes down to the way they approach values. When someone is buying or selling a piece of art, there isn’t something inherent to the work that produces itself as property. When you purchase a piece by Salvador Dali, that’s not just a piece. It’s part of his legacy. So when you’re purchasing a Dali, it’s like you’re buying into an entire life worth of work through that one purchase.
Some investments in artwork are better than others. People who want to buy something for their collection might not always be convinced that the purchase will pay off. However, art collectors usually know that the value of their collection will increase as time goes by and many museums with exhibit their work in a few years. An investment could be considered okay if it’s going to fund the future growth and maintain a working relationship with artists. The harder part is deciding on what kind of piece exists at which price point that’s worth buying current or future income from. It all depends on what kind of investor you are and what your intentions are behind the acquisition.
Collecting art can be much more personal than investing in it. Every piece of art has a unique past to it that goes all the way back to its creator, which includes their background and beliefs. This allows collectors to have a deeper connection with each work, while it can also make the investment process seem more authentic, since there is this extra insight with each purchase.
Why invest in art at all?
The question of investing in art is something many might grapple with. The reason it’s important to first understand what investing in art entails is because it can be time-consuming, costly, and complicated.
There are several reasons why investing in art is a good idea. First, the value of art can increase over time. Some artists put old work on the market which has never been seen before so you’ll be buying an unparalleled collector’s item. Similarly, completed works can be sold or given away and that can increase the value of the piece even more. You could also donate the piece to an artist or museum which would then display it and adopt its new owner as part of their world renown family. Yes, the value of art collectors is often discussed in speculative terms. That’s because it isn’t quite factual information. However, if you look at what many future dedicated collectors consider to be valuable then loan investments are an attractive option in certain circumstances. If you asked 10 artists why they would recommend a loan to someone then no doubt 9 or more would say that it was for buying into special collections or for expanding existing ones. And, who can blame them? Given the increase in demand for fine art.
Selecting an investment in art: what questions do you need to ask before you buy it?
All collectors are in search of a new piece—a work that will serve as a conversation starter and give them a sense of pride. An investment in art, however, is different than simply purchasing one random piece. To get started, you’ll have to ask yourself: what separates an investment from collecting?
To answer the question “what separates an investment from collecting?” there are three basic questions that are necessary to ask:
- What is your personal sentiment towards the artwork?
- Do you regularly visit art galleries?
- Can you easily hang the art on your own?
A person who wants to buy an investment needs to be able to question the work and make sure that it’s authentic to the artist. There are certain differences in a real masterpiece and one that isn’t worth buying. A good way to know if a painting is authentic is to ask more questions about the process of creating the piece.
What Can You Do with a Piece of Art Once You’ve Bought It?
One of the largest differences between shopping for art and collecting it is that when you invest in art, you typically begin to follow the developing trends in a way that collectors are unable to. Collectors typically go straight to painting or sculptures. They often won’t buy anything until they find what they’re looking for, while investors will purchase many other pieces before finding their most cherished pieces. Another difference between these two groups is that when selling an artwork, the collector will likely display it at home so other people can view it on a regular basis, but an investor may think twice about displaying artwork at their home because it would lower its value.
Collecting artwork is fun and rewarding, but the process of owning a piece of artwork means you have made an investment. When you decide to buy a piece of art, consider your time frame for enjoyment. If it is for aesthetic purposes to give off an impression as to who you are or what your taste may be, buying an artwork could be expensive. On the other hand, if one is purchasing a piece of art to use in decorating their home or office and do not plan on storing it away or adding it to their individual collection once they purchase it, purchasing a work can be more affordable.
How long should you keep your purchase versus
It’s hard to answer that question. Sometimes, a piece of art is just one of those pieces that remain in a home and loved by all who come after you. Other times, an artist makes specialized artwork for collectors, costing thousands or even tens of thousands of dollars. Buying the work and keeping it at your home will eventually decrease its value over time while buying and selling high-value art is usually a more worthwhile endeavor given that it can be worth much more money down the line.
To decide if you have a quality purchase, it’s important to think about how long you’re going to keep your investment. You might think that buying something expensive will mean that you’ll always have it around, but in reality, this is just not usually the case. For example, if you’ve just purchased a Picasso painting, it’s best that someone else handles the future ownership of that purchase, as it could be collectible.
