The Business of Art Investing

The acquiring of art for business purposes has increased since the early 80′s and has kept pace with other investments and in sometimes outperformed other investments. It is important for investors to remember that there is a finite amount of artwork from famous artist waiting to be bought and sold. Therefore, more moderate returns on art investments should be expected.

Art, like many other investments, can lose or gain value quite quickly. Art is unique from those markets, though, because the reasons for a change in value are often unforeseen and objective. Unlike stocks and real estate, an art investor can’t go to a single source and find out exactly what an art investment is worth.

As a business, art investing can mean quite a return if the piece is held for long enough. Many investors new to the art buying industry have been attracted by the advertising of record art sales which have taken place in recent years. A large return isn’t guaranteed, but it’s certainly a possibility that’s intriguing.

Besides giving some a very tidy return, the business of art investing isn’t subject to market fluctuations like other investments. Buying art doesn’t require as many fees and related costs that, say, buying stocks does. That is an added benefit for art buyers who are already seeing higher than average returns.

The biggest downside to art investing as a business is not making the wrong acquisition, but becoming subject to industry fraud. Having phony artwork and passed off as real has lost art buyers millions of dollars. Usually, the people passing off these fraudulent pieces are themselves frauds whose brokering credentials are questionable at best.

To prevent fraud and also ensure the value of a piece, authenticating artwork with documentation, or provenance, can be a great idea. An authorized appraiser can make sure the proper documentation is in order to determine the pieces true worth.

Most new art investments aren’t made with all the pertinent information at hand. Art investing is a business and it’s important to invest in that business aggressively. If it’s possible to invest more money in an artist premiere pieces of art, then that’s what should be done. Buying a piece that an investor likes as well as captures the interest of the industry is quite important.

Many critics of the business or art investing might contend that art is entirely too unrealistic as an investment strategy. They conclude that while stocks and other conventional investments bring in a steady income, artwork only becomes profitable if it can be resold. The profit resale value of art is never an exact science.

Acquiring art has quickly become a feasible part of a diversified portfolio. This is not only the case in America, but in countries worldwide. The Middle East and Far East have hosted investors who’ve completely bought into the idea of investing. As of late, the Austrailian art market has become more prominent as well. Many a multi-million and billionaire foreign business persons have invested steeply in Western art antiquities and newer creations. It makes sense that the business of art investing intrigues so many as the world economy broadens and traditional investing becomes less sure.