Be a smart buyer of art
YOU DON’T NEED TO PUT DOWN MILLIONS ON DAY ONE; START SLOW AND STAY STEADY, ADVISE INTERNATIONAL ART COLLECTORS
You don’t need to put down millions on day one; start slow and stay steady
When I start with a new client, half my job is to say no, especially to people from finance who think because they can master one market they can master any market.”
Wendy Goldsmith |
Adviser in art
Andy Warhol, the famous American artist, once said: “Making money is art.” But what about making money from art?
There is a boom in the global art market that is delivering some eye-popping returns for buyers in the past few years, drawing new collectors keen to invest in an asset class that offers cultural as well as financial appreciation.
But not everyone needs to own millions to start an art collection. Even modest sums for a start can be invested with up and coming artists who later may just fetch a windfall if you decide to seel the work.
For many investors, the market has grown too big to ignore.
Last year, global sales of art reached $63.7 billion, according to an Art Basel and UBS report. Art has delivered average annual returns of 8.9 per cent since 2000, an index tracked by Artprice.com shows. But the market is opaque, unregulated and sometimes, extremely illiquid.
Gallery owners and auction houses charge commissions of 25 per cent or more, sometimes negotiable, and art buyers must avoid the pitfalls of forgeries, fakes and rapidly changing tastes.
“In the art market, there are no rules, that’s why it is such a minefield and why it has such opportunities,” says Wendy Goldsmith, a Londonbased adviser in modern and contemporary art. “When I start with a new client, half my job is to say no, especially to people from finance who think because they can master one market they can master any market.”
While some collectors have made fortunes, Goldsmith says the world is littered with warehouses of art that have depreciated as much as 90 per cent. To help navigate these treacherous waters, we asked three of the world’s most successful art buyers for advice on starting a collection.