Art Collecting as an Investment

Fluorescent Perspex Crowd CollectionMost of us like to save or invest in one way or another if we can. While there are lots of ways of accumulating money based on wise investments, from stock and commodities trading through to investing in the property market, one of the most satisfying ways of making an investment is in buying something you love that you know will appreciate in value, whether it is sports memorabilia, vintage cars, or, of course, art.

But what are the advantages and disadvantages of art collecting as an investment compared with other ways of investing your capital?

Pro: You Can Enjoy your Art While It Is Gaining Value
While savings accounts and holding good stocks can give you a good return, they don’t really do anything while you are holding on to them. As long as you take good care of your art, it gives you something you can enjoy while it is growing in value, making your home look beautiful and allowing you to reap immediate benefits from your investment.

While other investments can also do this, like property, cars and antiques, since art is purely decorative it won’t require as much maintenance and can be on the whole simply enjoyed until such time as you want to sell it and reap the profits.

Con: It Can Be Hard to Part With
While selling shares rarely involves much emotional attachment, selling pieces from your art collection can be a lot harder, as you chose them based on your taste and have enjoyed having them around. However, if they are purchased as an investment rather than because you want the piece to keep for life, then you have to be willing to sell when it has appreciated to a satisfactory amount.

Pro: It Can Be Fun to Buy
Buying art pieces at a frenetic auction or beautiful gallery is certainly a more exciting experience than putting money in an ISA, and you can learn a lot about art and discover interesting works as you invest.

Con: You Need to Know What You Are Doing
Of course, you do need to have some good knowledge of art to ensure you are getting a good price and the pieces you buy will actually grow in value. If you are already knowledgeable or are interested in learning, however, this isn’t so much a drawback as an obstacle you can overcome with research.

Pro: Art Can Gain in Value Significantly
If you choose well, your art investments can offer a better return than many other kinds of investments, unless you are lucky enough to stumble upon a really hot stock while it is cheap.

Con: It Can Be a Longer Process to Get the Money from Your Investment
If you trade in stocks and shares or currencies, you can sell them pretty much instantly to get your cash back if you need it in a tight spot. With art, as with other physical investments like houses and cars, you have a longer process to sell them and get your money, unless you are willing to take less than they are worth, so it is not an ideal investment for those investing in case they fall on hard times.

Con: Insurance
As a final consideration, bear in mind that an art collection will need to be insured, and this can add to the amount you have to actually invest to own the pieces for as long as you choose to.

As you can see, there are a lot of things to consider when deciding whether art is the best investment for you. However, if you are passionate about collecting art, then you can certainly find it rewarding and profitable.

Image: Meeting Fluorescent Group Crowd Collection (detail)

Author: Neil Buckland

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