For most collectors, art isn’t just meant to serve as a decorative item. It’s also high-value items that have a lot of profit potential. From paintings to sculptures, enthusiasts invest in them to add and expand their portfolios. Similar to bonds and stocks, the value of artwork can improve over time, especially if the emerging artists behind the pieces achieve successful careers. However, not unlike any other market, there is a level of risk involved with it. And to minimise the possibility of buying a lemon instead of a peach, I’ve laid out a few of the most common mistakes that you must steer clear of when investing in artwork.
- Not doing your research
The true value of any piece of art can be more than a little difficult to determine. After all, its value usually hinges on the market. And if you don’t do your research, you will risk spending much more than the desired item is worth. And as a result, you won’t maximise the profit potential of the investment. You may not even see the intended returns on it. So you must research any pieces that you’re interested in purchasing before buying them. In this way, you’ll avoid overspending on the item and ensure that it is worth getting.
- Overlooking provenance
Provenance essentially refers to the proof or documented ownership of an art piece and is primarily used to ensure its authenticity. Because of this, it must never be overlooked. The value of artwork can often depend on the legitimacy of its records, after all. And without records, it is unlikely that the investment will pay off. So, before any purchases, always make sure that the documentation of the piece is in order. This can save you from a lot of trouble later on when you decide to cash in on your investment.
- Spending without allocating a budget
What was once an expensive endeavour reserved only for the wealthy, the collection of artwork has become much more accessible today, even for those who may not have unlimited funds at their disposal. However, this doesn’t mean that you should make purchases without establishing a budget. When all’s said and done, these pieces can still cost a good amount of money. And if you don’t give yourself some time to check how much you can spend, you may end up putting yourself in dire financial straits for that item that you’ve always wanted. By having a budget, you’ll know how much you can safely invest in the pieces you want from the emerging artist of choice.
Investing in any form of art, be it sculptures or paintings, isn’t as simple as some might believe. Apart from staying on top of the market, you’ll also need to consider several factors, from the quality of the item to the emerging artists. And because it isn’t a liquid asset, it can be harder to convert into cash quickly. However, by keeping away from the mistakes listed above, you’ll improve your odds of procuring engaging pieces that will surely yield returns on your investment.