The art industry is booming, showing no sign of slowing down. If you’re thinking of investing in it but you don’t know where to start, here’s how.
Myths about investing in art dissuade like. You may find you prefer abstract versus figurative, bright, colourful shapes or muted landscapes. Once you’ve identified pieces you like, browse a gallery, or ask an expert to help you navigate local and international art markets.
Sophie Lalonde, Head of VIP and Partnerships for the Investec Cape Town Art Fair, has worked in the art industry for a decade, building relationships and a professional network across Africa and Europe. In 2013, she opened Sophie Lalonde Art in Botswana, and now heads up the art collector relations and programming for the Investec Cape Town Art Fair, having played an integral role in transforming it into the leading art fair on the continent. We asked her our burning questions.
Why is art a good investment?
During times of uncertainty, art can be a safe place to put your money; if you do your research on the artwork and artist you’ll either maintain your investment the average person from entering this potentially profitable market. You may think you don’t know anything about art, investing is only for the rich, or you might be afraid of being ripped off. While these are legitimate concerns, provided you’ve done your research buying art doesn’t have to be intimidating – and it can be enjoyable.
There are many types of art you can explore as a new investor. Broaden your search to get a feel for what you value or grow it. It’s exciting to learn about artists, follow their careers, and visit galleries, museums and other art spaces. More importantly, you get to live with the work you invest in – which is much more exciting than watching the stocks!
Can you profit from it?
As with all investments, nothing’s guaranteed, but doing your research and understanding an artist and their career can go a long way toward making a sound purchasing decision and mitigating risk. If you want to make a good investment and enjoy art, I’d recommend going to exhibitions, signing up for newsletters, and attending talks and art fairs. Make a concerted effort to gain insight into and knowledge about the industry.
Is art a long-term investment?
Absolutely. But it’s not for anyone who’s looking for a quick flip. When you buy an artwork, make sure you really love it because you may have to hold onto it for years to come before it accumulates its true investment value.
When should you invest in art?
When you have disposal income and you want to diversify your assets. Not all art yields a financial return but it has the potential to provide something more fulfilling. Investing in artists and artworks has brought me such joy and, unintentionally, it’s marked milestones in my life over the last few years. With that in mind, invest in art that you connect with.
What should you look for when you choose an artwork?
Collecting art is the most personal, intimate investment you’ll ever make. Your art collection talks to your personality, interests and ideologies. Collect art or artists whose work and practice resonates with you. Art’s best enjoyed when you’ve done your research because it gives you a greater appreciation for and understanding of what you’re looking at.
What do you need to know or take into account before investing in art?
Consider how the artwork will survive in the long-term. Have it framed, and position it where it’s less likely to get damaged – not in direct sunlight, as an example.
Are particular mediums better-suited to beginners, and how does that affect the price?
The medium can impact the price of an artwork. For example, a work on paper will cost less than a bronze sculpture by the same artist (but not necessarily by a different, more established artist). That’s not the only reason prices vary; other influences include the artist’s career and it’s market selling price. Work by an artist at the beginning of his or her career costs less than that of an established artist. But as the artist’s career progresses and he or she achieves certain milestones – solo shows, museum acquisitions, awards, a residency – the value of their work increases in tandem, also influenced by rising demand for it. Galleries ensure artists’ prices don’t rise too rapidly, so they don’t exceed the demand.
How do you know if an artwork is authentic?
This is where doing research comes in handy. On purchasing art, request a certificate of authenticity (COA), which is a signed document that verifies its authenticity. The easiest way to identify an original piece of art is to buy it from a legitimate, trustworthy source, either from the artists directly, a gallery or reputable auction house.
How do I know how much it’s worth?
If a gallery represents the artists you’ve invested in, you can find out the current selling prices from them directly. Alternatively, if the artist sells their work at an auction, look at the historical sales.
If you’re a first-time buyer, is it wise to chase after the latest trends or emerging artists?
Generally, I don’t think following trends is a good way to secure a long- term investment, but if there’s hype surrounding an artist amongst galleries and collectors, that’s a good sign. Collecting work by emerging artists is a great way to start if you’re on a budget and if you accept that its investment value is riskier.
What if you can’t afford artwork from a museum? Where should you start, and how much should you spend?
I love going to graduate shows, discovering artists at the beginning of their careers. Over the years, I’ve found some great work and, luckily for me, those artists have gone on to pursue an art career. Following their careers from inception has been exciting. Lastly, I find many interesting artists on Instagram; it’s a great resource for discovery outside the typical art-school realm. Choose artwork you can afford – its market value will tell you its worth – and go for quality over quantity.