13 Feb 2007

Art Investment

(By Nalini S Malaviya)

With an increase in awareness about investing in art, there are more buyers and the same time there has been a quantum jump in suppliers. Amateur art consultants, promoters and new galleries have mushroomed all over, and as there are an increasing number of players in the market it helps to go over a few points.

Fakes: Fake artworks of well-known artists are aplenty in the market and it becomes very difficult to identify them. Only experts can differentiate them and this usually involves a lot of money.

Quality: Art promoters knowingly and unknowingly push forward substandard works that have almost no investment potential. Especially, new buyers whose numbers have increased substantially in the last couple of years need to be extra cautious. It is absolutely essential that buyers - first time or otherwise must have some basic knowledge about art before investing. Art, an important asset is inherently different from real estate and mutual funds. It can be put up on the walls for its aesthetic content. However, if you pick up poor quality works, based on external advice, you not only lose out on its investment value but also on quality.

Remember, one cannot completely rely on art consultants and gallery owners. Even when you consult them, you must check out their credentials. In the recent past there have been exhibitions with students, and self taught artists (often hobby painters) where no one can guarantee their investment potential. Without any precedence, it is impossible to predict the future growth of an artist. Also, when galleries offer a buy back scheme, remember to check the fine print, because often the scheme covers their top artists and not every artist that they promote.

(Published in Financial Times, Bangalore)

No comments: