14 Jan 2009

Be cautious when making fresh investments

By Nalini S Malaviya

This year the stock market has seen major fluctuations and there are still no immediate signs of easing of the economic recession. Investors are facing a dilemma about where to invest. The financial scene appears bleak at the moment, and most predictions point towards a troubled future. Recent trends in the art market, too, have failed to inspire confidence in investors. Prices of most artists have fallen either substantially or at least marginally. Many senior artists are now opting to have an exhibition of their works without offering any piece for sale. This appears to be a strategy to try and maintain their market rates, but, how successful will it be, will become clear only over the next few months.

In such turbulent times investors should be wary of making any fresh investments in art. In case they would like to do so they should consider all aspects related to the art market dynamics – investment timeframe, risk factors and ease of liquidity. One could opt for artists who are considered safe from a financial investment angle and who have established and proven themselves over the years. Although, this forms a safe category and involves blue chip artists, the amount of initial capital is fairly high, and that can be deterrent for a lot of investors.

The other option which is appearing attractive is investing in upcoming artists. The major reason why this is catching on in a big way is that prices are low and these make for excellent wall fillers. However, one must be aware that the risk is high for this particular category. As the capital required is low, most people are open to spending a part of their disposable income on such art. In this case if one can do a certain amount of research, and back it with technical expertise in order to select quality works, it increases the chances of picking up a winner.

(Published in Financial Times)

7 comments:

CONTEMPORARY said...

First of all, i hope all of your wishes will come true, and just finished another honestful post from you, but how about the reality? how will they sustain? there must come little frustration, those who has played with laks and crrs, just watching their savings downing day after day, and these intellectuals well informed about the future, you are saying there is a new strategy now on board.
hehe, not for sale! only people will enjoy their creations, so will you think about those works? work always says everything about its creator, so contemporary senario of Indian Art will not show growth and prosperity, it'll be horrible for sure, i hope everything will come to normal, but as per global economic situation, it may take some time.
Happy MakarShankranti

NM said...

Those who are frustrated are the ones who were looking at art for short term gains. And, those who substituted it for conventional assets must also be affected now.

I've always maintained that art must be bought for the right reasons. Also, it is important to have the ability to sift through the hype - surely, there's plenty of it around!
I'm not propagating any new stategy but am cautioning people that they must do their homework before they invest in art.

And, yes I hope the economic situation improves soon!

A Happy Makar Sankranti!

Nalini

Rosanne said...

I think many people predicted this market correction the Indian art market was very out of control. This may sound a bit meen but many artists needed a reality check, the quality of the work they were sending to the market was not good but they were still getting outrageous prices. In the long run I think this will be a good thing it is just unfortunately that a number of people will most likely get hurt.

NM said...

It is unfortunate that people are hit by the economic crisis.
Pl see an earlier post 'Consolidation and stabilization phase of the art market'- http://indianartscene.blogspot.com/2009/01/consolidation-and-stabilization-phase.html

Nalini

CONTEMPORARY said...

It is so nice to find Rossane at this debate, i have a question for her, if you people were well aware about the poor quality of works, then why you have passed it futher?now the thing is who has invested by buying works as per your gallery's faith, they will never sold them as per even initial investment.And you cann't fingerout every artist on this regard,artist like Pratul Dash, you also representing his works in canvas and videos, what about his quality? i have never found anything wrong on his works quality.

Rosanne said...

I am by no means saying that all artist are doing poor quality work or that the artists we represent do poor quality work, however I have seen some work that is of a poor quality I agree that Pratul Dash does wonderful work of a great quality. As a gallery I believe that we show quality artists doing quality work.

Then again this can be said of other, non Indian artists as well, on a recent trip to Chelsea I was shocked at the all around poor quality and craftsmen ship in the works being displayed.

CONTEMPORARY said...

Hi Rosanne
Thanks for reply, actually after reading your statement on this topic, i thought you are saying about Indian artist which you are representing, anyway it's clear now, it's so good to hear you on Pratul and others, i wish you a prosperous 2009 ahead.