27 Nov 2007

Now is the time to be cautious

Investing in art might be a ‘cool’ trend, but one must remember that there is a lot happening in the art market and unless a buyer is properly clued in, one can easily suffer huge losses. According to a recent report in the media, the Indian art market is estimated between Rs 1,000 – Rs 1,400 crores, which is big money.

You just have to look around to realize how many people have turned art dealers, or see the number of galleries that have mushroomed overnight. Art has become a hugely profitable commercial venture and those with the business acumen have been quick to utilise it. Many artists too have been quick to join the bandwagon, and have been churning out works that might as well be factory made – slight variations to their popular themes and you have a collection ready for sale. Pricing? The less said the better. Unfortunately, price now has no connection to any kind of logic. You will see youngsters and fresh graduates not afraid to ask for a lakh or more. And, the strange thing is that they even find buyers for their works. A profusion of fakes - another aspect that is now plaguing the market more than before.

This leads us to the question if one should invest in art at all?
It appears that it would be a good idea to invest only small amounts of money in the market, at least for the moment. Also, one should take all necessary precautions. For instance, when one buys gold, one always looks for the purity of gold and goes to a reputed jewellery shop. For property, one looks for clear titles and checks out the credentials of the builder. So should be the case with art. In the past, we have talked about ascertaining the provenance and authenticity of an artwork, but now it is equally imperative to check out the credentials of the dealer or gallery. Reputed galleries are likely to have done the groundwork including the investment potential of the artist. The dealings are also likely to be more transparent. But, do proceed with caution; after all, it is your money invest wisely.

(Published in Financial Times)
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