Daniel Komala runs Larasati Auctioneers in Singapore. In advance of his sale, he offers advice to art investors and collectors:

For art investors and art collectors, who both drive the market but in different ways, the economic crisis poses different challenges and opportunities. Art prices have fallen by 30 to 40 per cent from the highs of a year ago. [ . . . ] For art lovers who are building a collection, now is the time to sharpen your portfolio or expand it. In this climate, auction houses will be prepared to put only the best work – established artists and the masterpieces of tomorrow – under the hammer.

And, like the collection my own company Larasati is presenting tomorrow, artworks will command fair prices, and not the dizzy excesses of 500 per cent plus above list price that auctions of Asian art fetched from 2006 to 2008. Collectors have an opportunity to purchase works by masters at the best prices seen for years.

That’s his advice to collectors, but his suggestion to investors makes those “investors” sound a lot like the dreaded art speculators who are supposed to have been beaten out of the market:

For experienced art investors who have a portfolio of paintings which have lost value, I suggest you regard this time as an opportunity to cut your losses by spreading your risk. For example, let’s say you bought a painting a year ago for S$100,000 that’s now worth S$50,000.

My recommendation would be sell it, and use the liquidity to buy several paintings by upcoming talents that will give you the chance to maximise earnings in two years’ time. Or upgrade by buying a better quality artwork than the one you sold, again to increase earning potential a few years down the line when the market rebounds.

For speculators, the fine art market is currently closed; and that’s a good thing for artists, auctioneers such as Larasati and both art investors and art collectors.

The Art of the Matter (Plush)