Whether you are starting your collection, an expert collector or designing a new space, I get this question all the time: “Why should I invest in artwork?”
There is no simple answer to this question. Art collecting is a $10 billion-a-year industry and can look great in a portfolio. Plus it’s much prettier to look at than a stack of bonds. Several factors come into play when investing in artwork and you can read more about the specifics of what to invest in on Investopedia. Here are a few of the top reasons to invest in artwork now.
I’m sure you’ve seen and read the stories about someone finding a Van Gogh or Monet hiding in their great-aunt’s attic. Yes, it happens. When a piece of art, that was thought to be lost, is found it’s exciting because of the rarity. Fine art photography can have the same appeal. When an artist only releases 1 or 10 of a certain image, that increases it’s value exponentially.
Ed Cooley’s Fine Art Photography is unique in the fact that most photographers release hundreds, if not thousands, of each image; but Ed Cooley only releases 100 of each image. The rate of appreciation (and value) can therefore increase much faster.
Art can be an incredibly emotional purchase, you see an image from childhood or a place you dream to visit. It’s an instant connection and you are drawn to a piece. Financial advisors might discourage this, but I have found this to be one of the smartest ways to invest.
Think about it: you are now emotionally attached to a project- you therefore are invested in the artist, their works and your own investment. We as humans will always fight harder for something we are passionately behind. You will pass this artwork onto your friends and family, you will encourage them to purchase (therefore increasing the value of your own investment) and you will follow the artist more closely than for an artist of a piece you didn’t have a strong attachment.
Yeah, this is a big one. The very same principals of investing in real estate or stock apply here. Can you afford your investment? Are you comfortable with waiting years to see a return? You need to respect where you are financially TODAY. You wouldn’t buy a $200,000 home if your budget is $100,000 in the hope you MIGHT see a return within 5 years. Well you might, but there’s another name for that…
This may seem redundant, but stick with me. Many collectors select their investments based solely upon the artist. When a living artist releases a new work many collectors will purchase without ever seeing the art. They do this because of the artist’s name and the value attached.
This can be highly lucrative and highly risky. There are artists who have withstood the test of time and constantly release works that are loved and highly collectible. There are also artists who have released many well-loved pieces, but tend to fizzle out in popularity. I have loyal collectors that purchase just to own Ed Cooley’s works and I support it whole-heartedly, but I also know they are purchasing art they love and are thrilled to be looking at for many years to come.
So I guess my question to you would be, “Why should you invest in art?”