Which Artworks make Good Investments?
We are often asked for our thoughts on which paintings have ‘the best’ investment potential. The short answer to this question is - it depends. Like all investments, the risk/reward relationship in art must be considered in the context of your personal circumstances. Art can be a great investment, particularly in turbulent financial times, but as with all investments, the key is making a careful and fully informed decision.
Our art advisory service can help you evaluate a specific work against your needs and the market. For general guidance, while we do not provide investment advice, here is a list of things to consider for contemporary or Aboriginal art:
- No 1 is to buy works to which you are strongly drawn – investing in art without gaining pleasure during the investment period totally defeats the purpose as far as we are concerned!
- Consider the reputation of the artist – this is particularly important if you are a relatively new collector. Acquiring a smaller or lesser work by a highly regarded artist will likely perform better than a good work by a less well known artist. (And you don’t have that additional risk that the artist may not ‘make it’)!
- There are exceptions to the advice above, and yes, lesser known and emerging stars do exist! If you think (or are told) you’ve found one, check these out carefully. Check to see if their works have been acquired by any of the National or State Galleries yet or by notable collectors such as Pat Corrigan (Corrigan Collection) or the Holmes á Court Collection, or if they have been exhibited by a well known gallery or curator. If they haven’t, they may still be great emerging artists, but have not yet earned rising star status.
- For well know artists, check reference books, not just the internet – The New McCulloch’s Encyclopedia of Australian Art or McCulloch’s Contemporary Aboriginal Art – the Complete Guide are two good books among many. If the artist is covered in a recognised art publication, you can be sure they are well regarded.
- When considering any work, compare it to other works by the same artist for quality and comparative size/price ratio. This is an area to watch carefully as there can be huge differences in the quality of works by the same artist and this greatly affects the price and their longer term investment potential.
- Carefully check the provenance. Where and how did the seller acquire the work from the artist and is there clear proof that it was painted by the artist claimed? Obtain clear, unambiguous documentation and keep it in a secure place, separate from the artwork. This is critical for the resale of Aboriginal artworks.
- Consider how long you would like to hold your investment. As a general rule, art is a medium to longer term - 5, 10 or 20 year - proposition. Marry your risk with your time horizon: i.e. buy a quality work by a well known artist – even a small one – if you will want to put it back to the market in 5 years. We suggest 10 years or more for an emerging artist.
- Keep your eye on the market – if there is a change in the artist’s status such as a large or important sale, a high profile exhibition, positive (or negative!) mainstream media coverage, or the artist ceases to paint for any reason – the market can change very quickly and opportunities may arise sooner than projected.
Happy hunting – if you find something you love and you want help to evaluate the work, please give us a ring!