Here’s how to invest in art even if you’re not a millionaire

The art market is more democratic than we imagine: most works sold in 2023 were for less than… $1,000! In order not to make a mistake, you need to train your eye, follow a few rules and let your heart speak.

Pleasure or real investment? In the highly codified world of the ultra-wealthy, also called “Ultra High Net Worth Individual (UHNWI)” who have a fortune of more than 30 million dollars (27.6 million euros) , art is a safe bet. “In 2023, 19% of their portfolio is dedicated to it, according to a UBS Art Basel report. And the richer they are, the more this share increases, reaching 24% for those with assets of more than $50 million.», notes Victoire Gineste, Vice President of Christie’s France.

Are these investments focused on achieving strong capital gains? Not necessarily. “Art enables the very rich to assert their social status. As a trophy, it allows access to Monopoly. Most of the world’s billionaires dream of owning one of Andy Warhol’s five very cool Marilyns, even if you have to pay 1 or 2 million more for it, that’s not the point.», explains Arnaud Dubois, co-founder and president of Matis. Blue Marilyn, painted in 1964 by the master of American pop art, was sold at Christie’s in May 2022 for $195 million, becoming the most expensive work of art of the 20th century!

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Also read: Works of art: an extremely profitable long-term investment in large assets

Capital losses can be just as spectacular

What do the very rich buy? Falling in love with an unknown artist is not excluded, but they rarely take a step aside. Here again, everything is codified. “They build their ideal portfolio using the ArtPrice100 index, which consists of the 100 highest-rated contemporary artists on the secondary market.», According to Victoire Gineste. The first place is unsurprisingly Pablo Picasso, followed by Jean-Michel Basquiat, Andy Warhol, Claude Monet, Zao Wou-Ki, etc. A business leader who has made a fortune can afford to live in luxury. Art also gives him access to a very closed social circle, the circle of those who attend major international art fairs or prestigious auctions. There’s nothing better than being seen at an evening (most sought after) sale in London, Paris or New York! So what if no added value follows.

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Also read: Investment: the best investments in art from 100 euros

Because art is a very volatile business and the losses in value can be as spectacular as the gains… The emblematic sculpture of the Luxury and Degradation series, “Jim Beam -JB Train Turner” (1986) by Jeff Koons, has lost half of its value in about ten years : it sold for $33.7 million in 2014, peaking at…16.9 million last year. Others, however, seem insurmountable. Basquiat in contemporary art, like Picasso in modern art, still sparkles. Paintings of African-American genius are the most prized on the market. The price of his monumental work “El Gran Espectaculo (Nile)”, created in 1983, increased thirteenfold between its first auction in 2005 ($5.1 million) and its resale for $67.1 million last year. These important works are undoubtedly reserved for the international elite.

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Also read: NFT: “on-chain” art, a promising investment?

Art is not just for the ultra-rich

Should we therefore give it up if we are mere mortals? “The art market is much more democratic than we think“, reassures Arnaud Dubois. Purchases for less than $1,000 (€920) accounted for 55% of global transactions in 2023, driven mainly by the acceleration of digital sales since the health crisis in 2020, according to ArtPrice. But how to buy and not make a mistake?

Buying a work of art must be done for pleasure, there are too many risks to be completely sure of the realization of added value», explains Mathilde Courteault, director of the artistic department of the private bank Neuflize OBC. But there are constants: “a very beautiful work that has a good pedigree, good provenance (which belonged to e.g. important collectors) and in good condition, will maintain a more stable value over time“, he continues.

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And to avoid mistakes, it is better to buy artists who have already sold and who already have a rating. “In our jargon, we call it the second market. In the first market, the market of galleries that defend and promote young artists, it is much more risky, there is no certainty of the evolution of the artist’s evaluation.“, claims Victoire Gineste.

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Auction houses are open to everyone

Unless you’re a millionaire, major works by major artists will remain unavailable, but there’s nothing stopping you from taking an interest in their smaller works. For example, 3,500 Picassos were sold in 2023,”half of which are prints available for the most part for less than 5 000 dollars (4 600 euros)», according to Artprice. Salvador Dalí, Victor Vasarely, and Bernard Buffet are also among the key signatures in the sub-$1,000 price range, thanks to numerous silkscreens, lithographs, and other engravings.This affordable income is of little interest to the most powerful auction houses like Christie’s or Sotheby’s.», according to Artprice’s report on the art market in 2023, but you can turn to houses like Millon & Associés in Paris or all those that have a window in the provinces.

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All of them are open to the public, you can exercise your eye there and, unlike museums, you can also… touch. Interested in a chair? You can sit on it or turn it around to check its surface», specifies Victoire Gineste. And if something appeals to you, you will need to check the consistency of the offered price in relation to already sold identical or similar works on the auction house sites or on the ArtPrice or Artnet sites. Almost child’s play! The hardest part remains: crossing the threshold of houses or auction houses, places that are sometimes impressive for newcomers. A habit to get into.

Also read: His gallery bets on digital art

Half of the works sold in 2023 were for less than $700

High-end market

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Affordable market

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Global Fine Art and NFT Auction Market Split by Price Range (2023)

Source: Artprice

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