The world would be boring without art. Art is empathetic. It gives you freedom. Most importantly, it’s a fantastic way to invest.
Many investors use the maxim “Only invest what you understand” to increase their fortune. After all, investing in stocks without adequate knowledge is akin to gambling. The same idea might be said to apply to alternative investments like fine art.
Most people who invest in alternative investments initially fall in love with the investment before making a purchase. Meaning that any increase in value in their collection is merely a bonus and not a necessity because they have a true passion and interest in the items they chose.
Your portfolio will get another level and dimension if you invest in works of art. Today, buying art entails more than merely storing a few paintings for a long time before selling them.
This tutorial is for you if you’re having trouble understanding how to spend money on art, especially if you’re tight on cash.
Why Invest in Arts?
If you’re an astute investor, you already know that diversifying your portfolio is the key to creating a secure investing base. If you’re thinking about purchasing art, you should first be aware of the benefits and drawbacks of including it in your collection:
Please read: Investment Management
Benefit:
You can appreciate the art
If you want to invest in something that will provide you with personal pleasure, art is one of the greatest options. After all, it is a possession that you may admire and show.
You may enjoy your artwork for as long as you own it, unlike other investments that you cannot touch or see.
It doesn’t rely on the stock market
Your art won’t be impacted by market fluctuations. It is a fantastic hedge against inflation as a result.
In the realm of art, volatility is also not a problem, so you can feel secure knowing that you won’t be troubled by ongoing market fluctuations.
It gains value over time
Contrary to the values of corporation stocks, which indicate erratic pricing, works of art often increase in value over time.
You can undoubtedly make money off of this investment type if you’ve done your homework and made a sensible choice of art (either with or without a mentor). With any hope, the worth of your artwork will increase over time.
Can purchase a variety of artistic works
You may buy a plethora of different types of art. You can shop to your heart’s content whether you enjoy buying paintings, ceramics, sculptures, or even digital art.
Investing in the arts is difficult
Art investment was once restricted to the wealthy. Today, though, such is not the case.
Nowadays, it’s quite simple to learn about differences
Drawbacks:
It’s an inflexible investment
The fact that art is not as liquid as other investments, like equities, which you can sell in a matter of seconds, is another major drawback of investing in it.
Making money from your work could take a while. In dire situations where you require quick cash, you can even be forced to sell it for less than you paid for it.
You must maintain it in top shape
One of the major issues facing inexperienced art investors is this. If you want to invest in art, you should understand how to properly store it. If you don’t properly keep it, your item will degrade with time. You’ll consequently lose money.
Additionally, you must be more careful if you intend to purchase more delicate works of art, such as porcelain.
A keen eye
The world of art is quite intricate. It is quite competitive, and you need a sharp eye as well as some luck. The good news is that you can improve your artistic eye over time even if your first piece of art wasn’t the best investment.
There is no assurance that its value will increase
Purchasing art is a risky investment, much like other kinds of investments. You could win big, but you could also lose money. Even seasoned buyers make bad decisions because the art business is so complicated.
Types of Artworks to Invest In
Diluted shares
It’s possible that you won’t be able to purchase pieces of art from well-known painters unless you have millions of pesos available. Fractional shares are useful in this situation. You may diversify your portfolio by buying shares in pricey works of art on a ton of platforms.
Digital art
This is currently one of the most common methods of art investment. Online artists sell their digital works for sale, or you can buy NFTs.
According to Forbes India, NFTs have been progressively gaining popularity since 2019 and are projected to have a $231 billion market value by 2030. A blockchain network supports non-fungible tokens, which offer authenticity, liquidity, and transparency.
In only a few clicks, you may purchase numerous NFTs from a variety of well-known and up-and-coming artists both locally and internationally.
Solitary works
Choose individual works if you’re the kind of investor who likes to purchase items you can display in your house or place of business. These works of art are available for purchase from dealers, art fairs, or auction houses.
Do your study in advance because there is a vast range of works that cater to various types and tastes. If you want to be certain, seek artwork that has previously been purchased more than once and assesses its growth rate.
If you want to save artwork for a long time, it’s also a good idea to check the artist’s earlier creations.
Art funds
Some businesses offer art-specific funds for investors like you, even though there are no index funds or ETFs in the art market. Similar to blue-chip equities, blue-chip art includes both unique works by other artists as well as the creations of great artists, the works of which have been appreciated through time.
Things to Think About Before Investing in Art
Here are some things to consider before making an art purchase:
- The various kinds of artists
- Genuineness of provenance
- Your financial objectives
- Be sure to consider the piece’s state
Purchase Options for Art in the Philippines
It’s a common misperception among non-artists that it’s difficult to discover artwork in the Philippines. But you’d be astonished at how approachable art is.
Here are the various platforms and ways where you can purchase pieces of art, regardless of your financial situation.
- FilipinoArt PH
- Local Galleries
- Finale Art File
- Provenance Art Gallery
- Galleria Duemila
- Auction Houses
- Leon Gallery
- Salcedo Auctions
- Art Fairs
How to Get Started with Art Investing in the Philippines
You may be asking at this point how to begin investing in art. In actuality, it’s simpler than you may imagine. A step-by-step tutorial is provided below.
Step 1: Value the arts and be aware of your tastes.
Step 2: Determine why you are collecting art.
Step 3: Establish a budget.
Step 4: Select your preferred platform.
Step 5: Keep your work of art.
Step 6: Learn how to market your art.
Investing in Art Collections in the Philippines: Some Advice
Here is some additional information to aid you in your decision-making now that you are aware of how to invest in art.
Learn what you like
While buying what you like is important, you should always work to educate yourself about art. Understanding the many types of styles and mediums will enable you to make future decisions with greater knowledge.
Find out how the cost of artwork might vary depending on the medium. An acrylic painting on canvas may be more expensive than a pencil drawing on paper.
It’s also wise to limit your investment to works of art that you know or that you think will retain their value.
Never be scared to begin small
If you’re just starting, you shouldn’t immediately start spending all of your hard earned money on art. It is advised to start modestly with a spending limit you are at ease with.
If you wish to spend more money than you have planned, save up for it for a few months first.
Understand current trends
Similar to fashion, art trends are ever-evolving. To choose the best items at the best rates, you must be up to date on the current developments in the art world.
Your art pieces’ value will be greatly influenced by trends and cycles as well.
You can haggle, but don’t take advantage of the artists
Many artists will be open to bargaining with you about the cost of their pieces. They will offer discounts if they can afford to.
But bear in mind that instead of undervaluing their job, you should always start with a realistic offer. Don’t undervalue artists; instead, treat them with respect. You will undoubtedly receive discounts in the future if you continue to purchase art from a particular artist, dealer, or gallery.
Avoid rushing into buying art
Take your time whenever you buy art. Don’t buy a piece of art solely out of excitement or a sense of urgency. You might come to regret letting your excitement get the better of you. Only invest in things you want and believe are worthwhile.
Make a wishlist of the artworks and artists you are interested in purchasing to serve as a reference.
Don’t worry too much about the immediate future
Keep in mind that it takes time if you’re just beginning as an art collector. If you want to make a lot of money, it can be tough to do it in a short period.
Consider art as a long-term investment if at all possible. It will probably take many years before your collection is valued.
Don’t let publicity fool you
Art fads come and go, which causes prices for works of art to change. For instance, you can anticipate an increase in the cost of an artist’s work if they experience significant popularity.
This does not imply that the quality of all of that artist’s work will always be great, though.
Conclusion
Knowing the benefits of investing in art now makes it rational to learn more about the process and how to start building a collection of works you can appreciate now and maybe sell for a profit in the future.
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