The Art Market. Investing for the future.

In the current climate of falling house prices and yo-yoing stock markets it is interesting to see that record prices have been paid for works of art in Europe, the USA and China.

So does all art rise in value? What’s a good investment?

Picasso painted every day of his long life yet even his pencil sketches are expensive.  The posters of his famous work that can be seen in numerous homes or institutions have no value.  A signed limited edition, of say Russell-Flint is resalable but has not increased much and antique prints are difficult to resell at the price paid.  More money is spent on soft furnishings in homes than on works of art.  Indeed prints are used as decoration and not investment.  Yet jewellery or unset diamonds have not increased in value at the rate of outstanding artists.  There are many artists whose work should be collected as investments.  The trick is to see whose work will stand the test of time.

Earlier this month, news surfaced that Damien Hirst split from the gallery chain, Gagosian, which has worldwide reputation. So why should this be significant, many treat Hirst like Marmite, you either Love him or hate him. Either way we should recognize that he is the most successful living British artist having amassed a fortune of £215m. His split with gallery director Larry Gagosian, who is the world’s most powerful art dealer, who has more exhibition space than Tate Modern, is significant as it exemplifies the fluctuations in the value of art.  These fluctuations also occur in the stock market, however, the rate of return on high profile art is much greater.

So why have they spilt?  Possibly due to the fact that Damien Hirst sales have dwindled, pieces such as the spot print L.S.D that would have sold for £7,000 upwards a few years ago remains static (not selling in many London galleries) at around £4,000. I believed following his solo show at Tate Modern, which ended on 9th September 2012, Hirst’s work would be worth significantly more, which was justified by the hundreds of art lovers who flocked to his exhibition. Unfortunately with artwork, especially originals (as prints tend not to have much intrinsic value) no matter how an artist is perceived the value of their work is prone to fluctuations. Although over time they will have a steady rise. Hirst’s sales might be quiet now but in time they will defiantly increase like many other commodities. The trick is to buy an artist early on in their career. Purchase because you love the work. Purchase a piece that has the potential to be in your family for generations. Remember, purchasing art for investment is a long term activity, you are unlikely to make a fortune over night, but what you will have is the possibility of enjoying your investment for a significant length of time and you never know… you might just find the next Picasso….

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