Investing in contemporary art – sales dynamics
Contemporary paintings can be a great investment. You just need to get them in the right place, with the help of qualified consultations, and take the time to “skim the cream”
Succession painting or a successful purchase
If you inherited a genuine Andy Warhl painting or acquired it yourself some 45-50 years ago, then you and your children and grandchildren are wealthy people. Good money can bring a less famous author. Indeed, modern painting is not only an opportunity to surround oneself with something beautiful, but also a way to earn a lot.
Russians traditionally perceive investing in art as a kind of exotic. And if they decide to invest in this way, they prefer antiques. These stereotypes are a consequence of inertia; they have no practical basis.
First of all, art is an “eternal theme”. Demand for it has existed since the Stone Age and will only grow as human society develops. Oil paintings cannot depreciate like any currencies or stocks. The desire to buy them does not depend on market conditions, and the cost is supported by a real need for positive emotions. Therefore, painting on canvas is an even more reliable investment than gold. After all, each work of art is singular and unique.
Secondly, contemporary art can be no less profitable than the creations of old masters, and its availability is definitely higher. The benefits of investing in the works of contemporary artists are obvious:
– contemporary art is accessible not only to wealthy people, but also to representatives of the middle class,
– the likelihood of encountering a fake is significantly lower, there is no need to spend money on expensive examinations,
– there is a chance to get a “golden lottery ticket” – to buy a picture of the artist, which in the future will rise in price by thousands of percent (canvases by Kandinsky, Falk or Chagall at the beginning of their career could be purchased inexpensively).
In addition, the “time factor” in the case of antiques is almost completely exhausted. What is the difference between 250 years of painting or 350? This has almost no effect on the price. And modern painting will transfer the imprint of our era into the future and will almost certainly become more expensive. An example of this is the ordinary icons of the 19th century. Once they were painted by now unknown icon painters and were accessible even to simple peasants, but now they are of considerable value.
How to buy a picture
The problem of investing in contemporary art is that it is much easier to “get lost” than among the masters of the past. In the case of antiques, expert assessments have long been formulated and recognized by the world community. Fashion can have its effect, but these trends are medium-term and do not play any role in large time cuts.
The current artists are not so “transparent”, the price of their creations is determined by not obvious criteria. Here it must be understood that the answer to the question of how much the picture costs is largely determined by the author’s biography. Experts argue that a successful debut at an exhibition of contemporary art can lead to the fact that the work will begin to be valued twice as expensive. If the picture became the property of a reputable museum, then this is an even more significant application for success.
Nowadays, in painting, there are practically no “unrecognized geniuses”. Authors and art salons are constantly looking for each other, and therefore buying a painting on the street is unlikely to be a good investment. Such a canvas has almost no chance to get into well-known catalogs and bring substantial profit to its owner.
It makes sense for the investor to go to the art center. Here one more advantage of the paintings of contemporary artists as a subject of investment will appear – the buyer’s opportunity to receive free, objective and honest advice. The fact is that the cost of an individual canvas is relatively small. The specialists of the art center are more interested in a constant flow of satisfied customers, rather than selling one painting at an inflated price (and as a result, a ruined reputation).
How much can you earn on modern painting
Probably the most adequate study of the value of modern painting was conducted by the professor of the University of Massachusetts R. Campbell in his fundamental work “Art as a Financial Investment”. In his work, he used information on transactions officially concluded with the works of one hundred contemporary authors (paintings were painted in the 20-21 centuries). This “slice” is a miniature market. The data for a 25 year period were considered.
First of all, it is worth noting that during all this time there has never been a moment when investors would have suffered losses. Even 10% of the most unsuccessful investments eventually increased the capital of their owners by 1.5 times. 10% of the most profitable investments have risen 10 times since the mid-80s. And the bulk of the investment has become 6.5 times more expensive.
For comparison, a bank deposit during the same time increased the investment by less than half, and the price of gold increased only 3.5 times.