With the number of global art sales growing exponentially over the years, we are seeing how incredibly accessible the art market is becoming for everyone and collecting art is now seen as a financial investment choice, as well as a passionate hobby. Art is now considered as a viable asset class on its own, which just like any form of asset requires thorough evaluation and due diligence.
Having worked extensively with art collectors and professionals who deal with art wealth management, I have built up my knowledge on the crucial aspects of wealth planning and art. This is why I am writing this blog today to share what I believe are the fundamentals of art wealth management.
If you are looking into collecting art or already have a growing art collection, I would like you to consider the following factors in order to become a better art wealth manager:
- Constantly building on your art market knowledge
Having a functional understanding of how the art market works is essential to making sure you are investing wisely, when it comes to investing in art. You will need to be aware of what the current trends are, the present market conditions and the different valuations of varying types of art assets.
You can build on your art market knowledge by reading art publications, like ArtNews – a personal favourite of mine, attending local or international art exhibitions or even networking with art professionals that you can meet at galleries and art events.
- Do your research!
I cannot emphasis enough the importance of doing your own research and due diligence when it comes to buying art. When you are out in the market as an interested buyer, you need to be looking into the provenance, authenticity and condition of the art pieces that you are considering for purchasing.
When researching a potential purchase, look into its history, style, medium and also its record of previous ownership to ensure that you are getting an authentic artwork. You should also look into the artist’s reputation and their past sales of similar pieces. Also, consider using a reputable art expert to authenticate a potential art purchase or the artworks you already own. This will save you a whole lot of hassle of doing everything yourself.
- Handling, storing and shipping…
When it comes to physical art, it is important that the logistics of handling, storing and shipping of your art assets are completely thought through. I cannot recommend enough that you hire professionals to handle your artworks, especially when it comes to having them delivered or put up in your space. Any damage to your art asset can do irreparable damage to its value, so it is best not to take any chances with it.
- Diversify your art investment portfolio
This is something that I have shared in a blog before and I would like to reemphasize once again the importance of diversifying your art assets. When purchasing art, art collectors have to be mindful that artists can fall in and out of trends and the value of their work is definitely impacted by those changes. When you’re invested in a single artist or a single artwork, if the market for that specific artist or genre goes out of style, you have complete exposure to that depreciation in value. So experienced art collectors buy artworks by a variety of different artists.
Additionally, acquiring a diverse portfolio of artworks, focusing on incomparable examples of an artist’s most recognizable work, from the most important period of their career, is another way to maximize investment returns because these works are most likely to achieve the highest prices when it’s time to resell. It is also important to focus on artists with strong markets and career trajectories.
There you have it – some important things to think about when it comes to art wealth management and buying art assets. So, definitely factor some of these in when you are looking to optimize your art collections as an investment and safeguarding them as assets.
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