In May 2004, Picasso's 1904 oil painting, Garçon à la pipe (Boy with a pipe), sold at Sotheby's in New York for $104m (£58m), becoming the most expensive painting ever sold at auction. The fact that the picture had sold in 1950 for $30,000 inevitably strengthened the popular notion that art has become an attractive investment opportunity. The more spectacular gains in art values in recent decades have spawned a new sector within the financial services industry - that of art investment analysis.Art has taken on a new identity as an "asset class" similar to stocks and bonds. But while a masterpiece on the drawing-room wall arguably brings a little more social cachet and visual pleasure than shares in, say, Nokia or Cisco Systems, many people in the art world worry that the aesthetic content of a work of art can become overshadowed by the intoxicating aura of its dollar value.
In the colorful world of art, the business of investing is black and white. You buy a piece of artwork, and hope the artist's work goes up in value. Experts say you might not need to wait long. It can happen within hours of your purchase. Investing in art is investing in your own aesthetic. You have to want to live with the artwork, but you also have to educate yourself on the business end. In addition, you have to be careful, because tax laws are constructed in a way where if you buy art as an investment, you cannot 'derive pleasure' from it. In other words, it cannot hang in your home. Just lock it in a vault.investing in art is the hottest trend prevailing worldwide and turning into a fine art by itself. In addition, the investment market has touched the Indian shores and is playing up to the art galleries in metros like Mumbai, Delhi and Chennai. With its wide range of ancient, modern abstracts and contemporary paintings available in mixed media Indian art itself is finding connoisseurs worldwide. An eclectic showcase of colorful artworks in pure forms and in mixed media is currently floating in the market waiting to become big investments in the near future. Artists, art dealers and investors all over the world are trying to cracking the code of the value of priceless masterpieces and their resale value.
Investing in Art is on the threshold of becoming a sunrise industry for art dealers. While investment is a heady decision and buying a painting is choice of the heart it is not quite clear as of now if an art lover, for the sake of art would want to resell for a higher price. Until about ten years ago, art investment was unheard of. Rarely does it happen that a masterpiece unearthed from an obscure flea market, sold in an art gallery for cheap is later resold ten times its value.
Now, you have to find out how you can invest in art. Ask yourself,” am I interested in art?” This may seem like a basic question, but too often novices enter the art market without a passion for the medium. The result is that they make poor choices and end up with pieces they don't even like. To find out how far you are knowledgeable about this business, if you took an art history course in college, then good for you. However, don't think that your knowledge begins and ends there. The art world is like any other market, it lives on what is happening today and it hunts for what will happen tomorrow.One way to find out what kind of art lover you are is by visiting galleries and art museums. Museums will give you an indication of the field; galleries will tell you what is going on in the world of art right now. Think of galleries and shows as the marketplace; you must attend them to know what is going on. As a bonus, gallery staff can usually answer many of your questions -- but keep in mind, they are salespeople.
When it comes to art, or any investment for that matter, it is easy to think that you know what you are doing. After all, you see the success of some and you think, why not me? Art, like property, has a lot to do with business, but even more to do with the buyer's taste. Experience plays an important role in this investment process. While a first time buyer isn’t likely to understand how and why the market swings on taste, he isn't necessarily at a disadvantage. Perhaps the best way to insure your investment is by purchasing something you like. Art prices rise and fall, so if you buy something that you like, you will be able to live with it through the lean years.
A.R. Murugadas, an art investor, who has made huge bucks in the process says, “Trading in art is similar in some ways to dealing in other commodities -- it is subject to the market pressures of supply and demand. However, art prices vary with other, sometimes arbitrary, factors -- including aesthetics, authenticity, condition and rarity.”
Everything comes with a ‘risk factor’. As in any other business proposition, it is important to whet the fake from the original, a masterpiece from mundane, oil painted canvas from an acrylic. To minimize risks of bad investments avoid buying genuine fake paintings, as reselling them is tough. Like a picture, a painting speaks a thousand words and makes billions for the investor. For any painting to command that priceless ness, get adequate knowledge first from the art world. Art magazines and gallery newsletters, online guidance is some ways to prepare oneself before investing in art. Like any investment, art is a gamble. Do your research. Buy what you love because even though it might go through a transitory devaluation, the intrinsic value of the work is still there.
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