Investing in Art

I f you plan on retiring well, don’t rely on a pension fund alone to provide for your golden years. It’s better to make sound investments to prepare for your old age spent languishing on a yacht or hosting Scrabble parties at your beach abode. Property is going to take a long time to recover after the recession, and the markets are schizophrenic at best, so your next safest bet in a lucrative investment is art. And this doesn’t mean simply going out to buy a camera; it instead means buying work already completed by an artist.

Investing in art is something you need to learn to do; something that requires knowledge and skill. Now before you run off looking everywhere for art auctioneers, Johannesburg is the place to be when the hammer falls. And before you take your seat at an auction, go prepared with the following dos and don’ts…

DO:

  • set a budget. If you’re going to participate in art auctions to make money, you need to have money first. The only way to know how much you can invest is to set a budget… and stick to it. Remember that you’re not only budgeting for the price of the artwork, but you also need to factor in things like any auction house fees, auctioneer’s commission, and VAT, where applicable.
  • your research. Once you know what your price range is, find out which artist (in that price range) can be banked on for a return. The morbid truth is that if the artist is young, they have many more years ahead of them for production and fame. If the artist is nearing the end of their career, production is limited and perhaps more valuable.
  • attend the auction preview. Have a look at the art available for the next auction date. Are the pieces you’re interested in originals, copies of other artists’ works, paintings “in the style of” other artists’ work, etc.?
  • get some experience. If you’re serious about investing in art, it’s a profound deal, so don’t jump in guns blazing and blow your investment. Attend a few auctions without the intention of bidding on anything. Observe the main bidders in the room and see how it’s done. Get a sense of the “vibe” at the auction and how to handle it if/when the bidding gets heated.

DON’T:

  • get emotional. Investments are about money, so investing in art should be a logical, business-like decision. If you become emotionally attached to a piece of art, buy it as a décor piece for your lounge. Remember too, that if you are in love with the art, chances are you won’t be logical about its purchase and will end up bidding way beyond your budget.
  • get involved without reading all the fine-print. Each auction house will have a brochure and terms and conditions regarding their auctions. Get to know the rules so that if you win your desired bid, you know exactly what to expect when the time comes to pay up.

When looking to sell the art you already have, traditional auctions may not be as lucrative as an online auction or ecommerce store may be. The art market may be old, but don’t be afraid to use new technologies when engaging with it.

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