Investing in Art - 8 Tips

Forbes continues its series on investing in art, posting 8 tips for investing in contemporary art.  The 8 tips from Forbes are:

1. There are large number of contemporary artist, but only a small percentage sell at high prices
2. Although auction prices appear to drive the market, gallery sales account for 52% of art market transactions
3. Auction data of artists sale can be useful
4. Record prices for an artists work does not always impact values for the artist
5. Comparable sales is only part of the valuation process
6. Rarity does not always mean higher value
7. Discover new contemporary artists at art fairs
8. Buy what you love

Here are points 5 & 6 from the Forbes post

5. Comparable sales data only tells you so much about what art works will be sold for in the future. “Even if you take two Picasso paintings of the same size, concerning the same subject and made in the same week, one might be worth $5 million while the other is worth $20 million,” said Levin. “Data will not tell you that. That’s a question of taste, which comes from a long-term immersion in the market. The meaning of art is collapsing under the brute weight of data.”

6. Although art usually becomes more valuable the more rare it is, there are exceptions. When artists such as Calder, Richter and Andy Warhol produced enough works to become a brand in their own right, they became more valuable. “It gives inherent comfort to the market when art by a certain artist is bought and traded at a consistently high value on a regular basis,” said Levin. Gerhard Richter has been the top selling artist in post-war and contemporary evening auctions so far this year, with over $139 million of Richter works sold, according to ArtTactic.

Source: Forbes