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Using Art to Diversify Your Portfolio

Art As An Investment

Articule published in CSQ Magazine

By Delia A Cabral

Remember when houses were $30,000 and if you were lucky, you could buy a Jackson Pollock for a case of beer? Art is a good investment – better, apparently, than real estate – if one has some insight. Following are some things to keep in mind: First and most important is to buy what you love. Your response to art is subjective, of course. What one person finds compelling may leave another cold. But that’s the whole point. Art is a conversation. It tells us about the period in which it was created. It speaks to social and cultural factors and can express our deepest feelings. You can learn a lot about human history through art. And so it stands to show us who we are now and where we are going as a civilization. So find what kind of art you like. Trust your instinct. You do not need a degree in art history to collect art. Do you love figurative art? Abstraction? Photography? Perhaps sculpture? Or even installation art? Go for it!

Now that you know what you want, learn your market. Like every other market, the art market is cyclical. It is best to buy, of course, when the market is low. This sluggish recovery, for instance, makes it a great time to collect as it’s a classic “buyer’s market.” Artists and galleries are struggling along with everyone else. The good news is that the art being produced now is not only priced well, but very good. Struggle breeds creativity; art created during a period of financial retrenchment is more about expression and artistic substance than about making a sale. So today’s art, if you know it, is sincere and cheap – a perfect time to buy!

As you start getting to know the art galleries, you’ll begin to become familiar with the main players, whether they are in your neck of the woods or on the global art scene. Visit the galleries and, even better, the art fairs. Art fairs are popping up everywhere and are similar to film festivals in that the best of the best may come together to show their wares. You can cover a lot of ground there and visit many galleries from all over the world, all under a single roof. You can discover the galleries you like, buy on the spot, visit artistic works on their Web sites, or pop in on the artist next time you’re in their city.

If you want to buy work that is most likely the best investment, get to know art dealers and read art publications, particularly those that cover the kinds of art you favor. Look for what’s happening next. Check out emerging artists – younger artists just hitting the street or older artists who are finally breaking through. It is a bit riskier than buying big names, but also less expensive and a lot more fun. This way you can buy at entry-level prices.

If you find living artists whose work makes your boat float, find out if they are teaching anywhere. Perhaps they have some star pupils you can also collect. Check out what is coming out of the art schools. What are young people reacting to? Watch for patterns and you may find trends emerging. There will be leaders and there will be flocks. Your best investments, obviously, are the pioneers, the ones inspiring their peers with their fresh ideas and methods. Look for the artist who is breaking out of the pack, saying something a bit different than the rest, then look for key pieces, the breakthrough works.

Buying art can be very rewarding and potentially lucrative. It is not for the faint of heart, though, as some risk is involved. Buy from the heart and the head, not just from the pocket or from tip sheets, but do keep yourself informed. After all, the best part of the whole process – besides the art itself – is the hunt!