Three key questions that will help set you on the right path for art investment
Investing in art is an exciting and rewarding journey. Art has the ability to hold value over time. Unlike stocks or other traditional investments, art is less susceptible to the swings of other financial markets. Think back to the 2020 pandemic when many global markets saw sharp declines, the art market remained notably stable at the start and then scaled up throughout that period. Investment-grade art is often independent of external events, and its value tends to appreciate steadily over the years. As a result, art offers aesthetic enjoyment with the added bonus of a reliable store of wealth that can grow over time.
There are many quality artworks available in the market so it can be difficult to navigate and select something that you both love and feels strategic. My advice is to firstly clarify your strategy before you begin. This way you can ensure your decisions align with your personal goals and tastes. Whether you’re working with an art advisor or navigating the process on your own, answering these three key questions will help start you on the right path—and give you peace of mind throughout your collecting experience.
Start by asking these 3 Questions.
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What do you want to achieve?
The first step is to clearly define what you hope to gain from your art collection. Are you looking for pieces to enhance your home, create a lasting legacy, or make a financially rewarding investment? Maybe you’re attracted to the idea of building a collection that could appreciate in value over time, or you simply want to enjoy owning original works by your favourite artists. Understanding your goals will help guide your choices, from the type of art you collect to the budget you set. -
How much can you afford to invest in art?
Art can be a significant financial investment, so it’s crucial to balance your spending. While it may be tempting to dive in and purchase multiple artworks, it’s important to ensure you have a clear understanding of what portion of your budget can be committed. Keep in mind that art can take time to sell, so it’s best to maintain some financial flexibility for other needs. Finding the right balance between investing in art and keeping funds accessible for everyday expenses will ensure you can enjoy your collection without financial strain. -
What’s your attitude towards risk?
Every art investment comes with some level of risk—whether in the form of fluctuating market value or uncertainties around the future popularity of certain artists. Just like some people are more comfortable with high-risk financial ventures, collectors vary in how they approach risk in art. This is completely normal and everyone needs to know their own comfort level. If you’re highly risk-averse, you might lean towards established artists whose works have a proven track record. On the other hand, if you’re more adventurous, you may be willing to invest in fresh emerging artists who show promise. Understanding your risk tolerance is essential to making art investments that won’t cause you any stress or potential regret down the track.
By answering these questions before you start collecting, you’ll be well-prepared to build a collection that’s as fulfilling as it is financially sound.
You don’t need to be an art expert, but you should talk to one
There are many facets of the Australian art market, keeping up to date with the entire spectrum is a full time job. I really recommend visiting KAB Gallery to meet with one of our team. We are immersed in the art market, know the industry and love talking about it.
Our team is constantly monitoring the art market for quality and growth opportunities. I’m tremendously selective about which artists and the work I choose to stock, selecting not only high-quality original works, but those that I feel will hold or increase their value over time, based on what I know about the market.
Be sure to ask the gallerist lots of questions about the artist’s sales history, what prizes they may have won, their art-making process, how their works are selling on the secondary resale market and about their future projects and upcoming exhibitions. Again, a good gallerist will be happy to talk through these questions via phone or email and really guide you through the buying process.
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