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Saturday, October 24, 2020

Alternative Investment Tool: Art Investment

Art Investment can be a great idea if you simply love the very idea of creativity. In recent years, art as an investment tool and as an asset class against traditional investment tools have risen considerably. While the range of investors in the domain may be limited, nonetheless conjunction of certain factors in the recent past has been responsible for an increase in art as an investment. This is a common fact in the domain of finance having the potential to appreciate over time and market cycles.

artwork as investment 

Art Investment Has Received an Impetus

Although the demand for art keeps fluctuating, various segments in this domain have shown substantial resilience even during market volatility. Several experienced wealth managers and financial experts advise investing in art forms. According to Deloitte Art and Finance Report 2017, nearly 90% of American wealth managers advised art investment as a good alternative option for those who are looking at a different asset class option. 

alternative investmentsIn 2018 mega art auctions in New York have unearthed the siren song that investing in art can be good as it has the potential to outperform other asset classes such as real estate. Even Wall Street Journal announced that investment in artwork yielded 10.6% returns, which was more than other asset classes including real estate. 

How to Buy Art as an Investment Tool? 

artwork investmentWell, when it comes to investing or buying art as a financial investment asset class, the investor needs to keep certain things in mind. While most financial experts usually would advise “buy what you love”, there’s much more to it. First of all, make sure that you do your research properly, just as you would do while choosing to invest in direct equities or mutual funds.

Some of the best ways to do so are explained below

  • Define your and stick to your niche 

alternative investment toolsSince art is an alternative investment tool and is all about creativity, emotions tend to sneak in at times. Nonetheless, one can choose to make good use of emotions while buying art as an investment option. In this case, all you need to do is define a particular niche and gradually become an expert. What inspires you the most – contemporary artists or old masters of the Renaissance era or Impressionists masters. Once you have succeeded in defining so, it will be much easier to go about investing in art forms. 

  • Research the art, artist, and the dealer

Art as an investmentThis is a significant part of invest in artwork in terms of yielding financial returns. Once you have decided upon your niche, factor in the artist and all his artwork. Whether classical painters like Tintoretto and Botticelli or a young artist who has just started making the rounds in the circuit, you have to do thorough research. It is often advisable that working with contemporary especially younger ones can make a lot of difference in terms of returns on investments. Ensure that you work only with a certified art dealer if you opt for classical artwork and painters. 

Art as an investment can yield substantial returns if one follows the rules in a dedicated manner. At the same time, art investment can be a highly satisfactory form of investment especially one is an art aficionado. Apart from this type of investment, there are various investments that you can make such as, investing in gold, property and many more.

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