Can You Make Money Investing in Fine Art?

Invest in art

Investing in fine art can make you money, but it’s a risk and certainly not recommended for the neophyte.

If you own a painting from one of the masters, Leonardo Da Vinci, Vincent Van Gogh or Rembrandt, you already know you own a piece of history, and the masterpiece is likely worth millions. That’s not what we’ll be focusing on, as anyone who owns of those already knows what to look for. We’re going to offer a few tips that will help those less informed to choose an art piece for the most chance of increasing in value.

The $5,000 Question

It’s obvious that an original is worth more than a reproduction, that’s a given. But imagine this scenario, you spot a painting from a local artist, and not only do you love the piece, you feel it has potential to increase in value. The problem? The sticker says you can have it for $5,000. That’s more than you wanted to pay, so the sales person shows you something similar, from the same artist for $500. What’s the difference? Well, it could be several things, but likely it’s a giclées. Should you buy the piece or not?

A giclée is a machine made print, or copy of the original printed on fine paper with vibrant colors. For all practical purposes, it’s as good as the original, but it’s still a copy and will never be worth as much as the original. The copy may be adorned with words like, “museum quality,” or “certified authentic,” but it’s still a giclée. Whether you buy or not is your choice, just be sure and know exactly what you’re getting.

What To Look For in a G iclée

Even though it is a copy, it does put fine art within the reach of a much wider audience. In some cases, the value of the print can be increased if it is signed by the artist, or if written comments are made in the margin.

Museum Quality Giclées

As you visit art galleries and museums, you will occasionally see giclées on display. However, these are unique instances and not the same as previously discussed.

FACT: Both the BritishMuseum and Metropolitan Museum of Art have on occasion hung limited edition giclées.

You will find both museums and galleries selling limited edition prints for cash flow. Bottom line, if you buy a print, buy it for the artistic value and the emotions it brings, but not for an investment.

Prints and posters from Maxfield Parrish and Courier & Ives began making inroads at the turn of the last century. These posters gave the masses greater access to the images, and art appreciation grew. However, there is a vast difference between posters and fine art prints. The prints we speak of, the giclées can fool the untrained eye, they are produced by hand-pulled silkscreen, lithography or block print.

FACT: If you examine a poster, even a high-quality one with a magnifier, you’ll notice fine dots, which are what allows the ink to be laid down in a visual pattern. An exaggeration of this can be seen in older comics.

Rarity and Number

Okay, let’s say you’ve found two prints you like, how do you decide on which to purchase? Always remember that rarity is significant. If one artist has only printed one hundred, and the other artist, one thousand, all things being equal, buy the print from the one hundred batches. Beyond this, you’d want to choose the lower numbered print. If given a choice between number ten, of a batch of one hundred, that is far better than number eighty of the same batch. If the print is personally signed by the artist, again, this can increase the value. Additional factors to be aware of:

  • The condition of the print
  • The significant of the piece
  • The notoriety of the artist

Art on The High Seas

There are all types of cruises, those that take you to the Caribbean, Alaska and other ports of call, and cruises designed specifically for art lovers where auctions are held, often daily. If you’re interested in art as an investment, these cruises can be a perfect place to mingle with those who love and appreciate art, discover unusual pieces and bargains, and feel confident you’re not being scammed, an important consideration. The art you buy at one of these auctions will come with a certificate of authenticity, likely be heavily discounted and will certainly be from an artist of renown. If you have risk capital to spend, an art cruise could be a wise choice.

CAUTION: Just because a piece of art is certified authentic, does not necessarily make it valuable. As stated earlier, rarity is the key factor – often when an artist passes away the value of their work increases.

Whether you’re on an art cruise or attending an auction at a local gallery, it’s essential to research before plunking down the cash or credit card. Either attend the auction with an art expert or research the art and artist ahead of time. This can easily be done by Googling the artist’s name or checking eBay or similar sites for related art for sale. The smart art investor will know the artist and the price they should pay, before placing a bid.

Buy and Sell or Buy and Hold?

Art experts state that statistically, only about one-half of one percent of paintings are resold, most being bought for the long term. Because of this, art sold at auctions often has a skewed price. In most, but not all cases, art sold at auctions will have a seller hoping for the largest price possible, while the buyer seeks a low purchase price. Nothing wrong with that, buy low, sell high is the old but truest expression of investing.

eBay or Sothebys?

Let’s say you have a masterpiece hanging on your wall, or you’ve found a rare item in an estate sale, what’s the next step? Well, you can either hold it, hoping for further increase, or sell it at auction. We’ll assume you need the cash and decide to sell, where is the best opportunity for a high dollar sale, eBay or Sotheby’s? While high-end art auction sites may cost you a higher percentage, ranging from 3% to 50%, historically you’ll command a higher price at a fine arts auction house. If you’re wondering why, it’s pretty simple, on eBay people are looking for bargains, at a fine art facility, they are searching for quality, authenticity and know the piece has been authenticated.

Fine Art and Inflation

Investing in art is, in most cases, a long term proposition, rarely does art appreciation rapidly unless the artist dies suddenly or there is scandal attached. During boom times, when the country is looking ahead positively, art can rises in value like a shooting star, while tumbling in value during a recession.

Is Buying Art an Art or Science?

When buying art as an investment, always buy with the head and not your heart. This doesn’t’ mean never buy a piece you’ve fallen in love with, only don’t buy it as an investment, but as a piece, you’ll enjoy for years to come. Art as an investment needs to be approached differently, with research and patience. Take a class in art appreciation, visit museums and galleries, spend time researching an artist that interests you. Remember the expression, “art is in the eyes of the beholder,” it’s rare to find a masterpiece hidden in someone’s attic, but anyone can learn to research an artist who has caught their eye. If you do find a piece that interests you but has a high price tag, have it appraised by an expert. That’s not to say an art gallery will try to cheat you, most are above reproach, but with your appraisal, you’ll have more piece of mind, plus a second opinion..