Once again, the Business Standard‘s excellent Kishore Singh gives art buying and investing advice to Indian collectors. But his wise words would be valuable for anyone in any art market. First, Singh cautions strongly against viewing art as an investment. The same buyers don’t expect their other luxury consumables to rise in value, so why should the art?
There is something not just naïve but puerile when a picture you want to wake up to in the morning in your bedroom, or want as a conversation point in the living room, must become an “investment”. You wouldn’t expect the same of the tiles in the bathroom, even though they might be more expensive than the art.
If you consider yourself an investor, there are some things you must take into consideration:
- It need hardly be reiterated that an investor must be fully familiar with the artist/period/series/theme of a collection, that competitive pricing be carefully monitored, and that value not be over- or under-stated. Purchase documents, provenance, and artist/gallery validation are extremely important to avoid being rooked by the fake market (which is larger than you imagine).
- To ensure that your portfolio does not suffer, instead of hedging your bets on one artist, I would recommend four different artists, but with some commonality of theme. As you add to these in succeeding years, you can also trade in the drawings for larger canvases, oils or acrylics, enhancing value. But always stay with the blue chip artists instead of experimenting with the more avant-garde, who are more susceptible to being buffeted by price variations. Besides, in the current environment, even though prices for contemporary artists have fallen sharply so you can buy them up cheap, recovery is likely to be slow. Definitely avoid those artists whose prices were inflated artificially, and whose values are now not likely to recover close to those points for at least several years to come
- Gallerists might promise you much more, but if the investment value of your collection grows by 10 per cent a year on a cautious but also positive note (which might seem a darn sight less than the over 100 per cent value escalations in the recent bubble years), it might just prove better than most other investment risks — at least in these difficult times.
Hung Up on Value (Business Standard)