June 1, 2012 Leave a comment
There’s a good reason why most players in the art market are high-net-worth individuals, and it doesn’t necessarily have to do with the high prices of art pieces. No, it has more to do with the fact that risks are high in art investment. Even the most seasoned collectors, art dealers and auction houses make investment mistakes that cost them obscene amounts of money. On the other hand, if you play your cards right, you stand a very good chance of getting very high returns. Indeed, it’s a high stakes investment game where the risks are high and the returns even higher.
The good news is that there are some ways to put the odds of a getting a successful investment in your favour.
Stick to the Middle Ground
The bulk of the interest in art investment typically focuses on the middle ground of the market. Investors, at least those who want to play it smart, focus on pieces that are neither too old to be considered antiques, nor too contemporary wherein their value is questionable. Pieces that are too old often raise complex issues of ownership, forgery and heritage, which can all potentially take too much of your time. Pieces that are too contemporary on the other hand, have yet to make the rounds at major auction houses, so issues of their deemed value may arise.
Sticking to the middle ground reduces your risk of making mistakes with your investments. The middle ground is mostly made up of contemporary art pieces that are neither too new nor old. What most investors like to do is purchase works from artists that have passed away since it gives a solid indication on the value of their art. This is because the supply of artwork has already been defined-of course, there’s still the risk of unreleased works and forgeries.
Research and More Research
Information is key to finding success in the art market. If you don’t have enough knowledge of the art market, make sure you do your homework before making any investments, Read as much as you can and talk to people from the inside. Scour through art magazines, visit art exhibits and have personal talks with the artists themselves-this is important if you’re planning to buy their work.
Invest for the Long Run
Multiple studies of the art market show that investment opportunities are more favourable than other markets when you hold art pieces for at least 10 years or more. Well-selected contemporary art pieces can easily become more valuable after just 5 years.
Art Market Analyses provide financial performance index data on the global Art Market for professional Investors, Art Appraisal Insurance Companies & offer Advisory Services.
For more information, please visit https://artmarketanalyses.com
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