How to Successfully Invest in Art - I

I do not wish to measure art in purely dollar terms so I would like to clarify what I mean by “invest”.

There are two Oxford English Dictionary definitions of Invest:

(i) Put money into property with the expectation of receiving a profit; and

(ii) Devote one’s time, energy and money to an undertaking with the expectation of a worthwhile result

When I say that anyone can successfully invest in art I refer to definition (ii). By investing in art with your time, money and enthusiasm you achieve a worthwhile result: the knowledge and pleasure found in art itself. With this approach, over time, you’ll become a connoisseur. Through connoisseurship you are very likely to meet definition (i) and receive a profit.

I am not an economist, however, you can look at art investment from the famed Warren Buffet’s perspective without having to squeeze art into one of the traditional asset classes (Melanie Gerlis demonstrates the difficulties of doing this in her analysis Art as An Investment – A Survey of Comparative Asset Classes).

Warren Buffet advocates investing in companies that you wish to be part of for a lifetime and calls it “value investing”. He invites investors to research all aspects of a company including the CEO and to spend a significant portion of time as an investor, thinking. If you invest in artists by honing your knowledge, understanding their ideas and future plans, their management and their other investors and support them over the course of their career, your art collection will likely become something of immense value to pass on to your children. This is very different from trading or flipping or following “hot” art trends.

There is no short cut to connoisseurship and it does take time, energy and money. Talking to artists, other collectors, curators and art advisors and using the plethora of information available on the internet will increase the pace of learning.

A collector friend of mine shared this wonderful anecdote with me. He has placed a large painting by an artist he knows well where his television used to be. He now comes home after a hard day at work and sits down with a whiskey to look at the painting instead of watching TV. Each evening it intrigues him, inspires him and allows him to relax and unwind.

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Director / Curator / Art Advisor 

Any views or opinions in the interview are solely those of the authors and do not necessarily represent the views of the company or contributors.