1. Contemporary artwork –
Contemporary art is the new in thing. It is also the most volatile markets in today’s world. It has the highest risk and highest rewards as well. So the tip here is to always invest in the best if you are going to go all out and risk the investment.
2. Possible Fluctuation –
Fluctuation in one market for one artist often leads to variations in the market of another related artist. The Knowledge of art history and movements can help better understand the connection.
3. Diversification –
The fluctuation mentioned above is the key reason investors need to diversify in their investments. Diversification can help reduce fluctuation set-backs.
4. Venture into the details –
Talking about diversification, the concept moving beyond just turning fine art into decorative art. Diversify into investing in different types of artwork and artists.
5. End the bias –
Always remember that the value of a painting is the quality of work and not the artist. Never judge art based on your perception of the artist. Creativity must be assessed in its true form, and you must never let bias get the better of you. If you are unable to be the right judge, it is a good idea to hire an art advisor to back up your investment.
6. Failed artwork and re-sale –
Many a time, artwork that that failed in the market is sold at a reduced price. It is a good idea to invest in such art as you can avail them at dirt cheap prices. But keep in mind the holding cost of such art before you can bring it back into the market for sale. Wait for a minimum period of 5-10 years before you re-sell to be able to gain at least a significant profit.
7. Forecast and record profits and losses –
It is a great idea to forecast the probable profits and loses of the investment you are planning to make before you get into it. So identify the pros and cons of the investment before making a decision. Also, ensure you keep in mind the value proposition of this investment in the future.
8. Buy low, sell high –
The concept of buying at low prices and selling at much larger margins of profit is vital for survival and thriving of any business investment. The key is to make more than it cost you.
9. Local and National Artwork –
Off late there has been a rise in demand for localized or nationalized artwork. Artwork from countries like China, India, Pakistan, etc are taking over the markets, owing to their originality and uniqueness. Additionally, countries of the middle east too are becoming increasingly known for their passionate artwork. Investing in such markets requires an in-depth understanding of local markets in order to manage financial and operational risks.
10. Primary markets –
This involves buying new art from young and fresh artists. Such a proposition is the riskiest of the lot as a majority of these artists do not really make it to the top, and sometimes these investments may end up being futile due to their lack of popularity.