A work of art does not only have a commercial value, it also has an aesthetic, playful and political value. Its market value resembles that of all goods, in other words it responds to the law of supply and demand. The value of a work is formed on both objective and subjective elements. It can be said that there are two major groups of actors who decide the value of a work:
Cultural institutions bring together major collectors, museums, journalists and art critics. It is these actors who decide what deserves to be an best abstract art and what is not. They value works of art and establish a hierarchy within these works.
Financial institutions include gallery owners, auctioneers, brokers and dealers who value the value of the works. The artists who are defended and promoted and the exhibitions that will be realized are determined from the tendencies and the relations that exist between these two groups of actors. This is where the difficulty of investing in art lies.
To choose a work of art: it requires a minimum of knowledge and visibility of the market, and anticipation to be able to know which works will be important in the future. In addition, be aware that there are listed works. There is therefore data on these works and their authors, and their quotation is evaluated on their sales history taking as a basis a period of several years.
Who can invest in art?
Previously reserved for the rich and the upper middle class, investment in art is now accessible to everyone. So there are investors among the major collectors, museums, banks and other financial institutions and companies. This type of investment can scare novices. Indeed, it requires special knowledge and passion. For collectors, therefore, pleasure takes precedence over seeking capital gains.
But it’s not just connoisseurs who are attracted by this type of investment. For the simple investors, the novices, it is the search for gain that is more important. They therefore call on specialized advisers who guide them on works to buy that can be a significant investment against their budget.
The Internet is a rich source of information for those who want to embark on this investment. The uninitiated can find there all the information concerning a work, that is to say the author and the detailed description of the work itself. And as it is no longer necessary to have considerable funds to engage in investment in the art, the market is now open to the uninitiated and individuals, regardless of their scholarship.
When you invest in a work of art, you can combine various strategies. The long-term purchasing strategy: this is the strategy to adopt for works of high notoriety. If you keep the work in a period of 8 to 12 years, it is possible that you gain a gain of 6% to 8% per year, maybe even more than 10% if you go through a specialized fund. To achieve these levels of return, you must invest at least $ 20,000, which will allow you to access the international market where the biggest players operate.