[intro]Good Market Advice from India for Everyone[/intro]
Kishore Singh writes in India’s Business Standard a lucid and well-argued case for more active management of one’s collection. The approach is more of a portfolio strategy toward an art collection than a traditional collector’s view. At the risk of over-stepping, we’re going to quote it at length with the reminder that the emphasis here is on timing the market well but the end goal remains less financial than art historical:
If you’re invested in art — even if only as a collector — experts now say you need to both sell and buy more in this period of gloom if you want to leverage the market. If that sounds paradoxical at a time when everyone has been advising caution and is probably telling you to lie low […]
One: Because everyone makes mistakes with their early buys, with or without the help of experts, you are bound to have some mediocre quality artworks in your collection that are probably now just an embarrassment. […] The answer might be to tuck these mistakes away on a staircase wall and hope nobody will notice, or stash them away in the basement. Yet, that’s an emotional rather than a rational thing to do. […] You rid yourself of something you probably no longer like, and recognise that it was a poor choice but — and this is reason number Two — you now have the liquidity to buy something else in lieu of the resold works. This is a chance to improve the overall quality of your collection, you get to buy when valuations are low and works are therefore affordable, and you probably get the pick of the crop at that price point. […]
Three: The art fraternity is currently licking its wounds (metaphorically speaking). It needs help and sustenance which can only come about with volatility, which will normally result from a strengthening of prices. But the more people engage in selling and buying, the more a sense of movement and visibility, the more the chances are of a faster recovery, even within the tight ambit of pressured prices. Any activity in the market is bound to boost the morale of artists, of gallerists, even perhaps framers, or insurers. It will bring in a money supply chain that could turn into a critical lifeline for the still fledgling industry.
Which brings me to point number four. You might opt to leverage the market for your own benefit, but it will also earn you the goodwill of gallerists and artists who will remember it in the long term. When the good times come around again, as inevitably they will, you will be remembered for your generosity, or at least selflessness. That’s when you can cash it in for better bargains, first right of rejection on rare works in the market, and so on.
Finally, five. If you have the money, irrespective of whether you are or are not a collector, or have earlier works to sell or not, this is the time to buy. Prices have hit rock-bottom and in the case of the moderns have again started to creep up, while the contemporaries are a fraction of what they were.
Leverage Your Mistakes to Create Value (Business Standard)