Should You Buy Art?

By Jim Watkins

Should you be buying art? This is a very personal question. The choice considers the many facets of who you are. If you can not understand the value of effort and beauty, then probably you could do better investing elsewhere. The value of art is intrinsic, yet there are some guides that will help to keep you from major mistakes. Learning about the general types can help you to pick the value from the general mass. I will try to do better than the old wives tale of "only buy it if you like it". I think the reverse is better said. "Do not buy it if you do not like it." Stop take a minute to learn the terms , try wikipedia or some other informational source. Then start again. If you know the basics then read on..

 

.According to an article by Money Week the price for modern paintings are off slightly, while the prices of contemporary and 19th century is nearly half of last years price. Impressionist prices are still higher than other styles from the period, so modern – and particularly 19th-century – works look relatively good value. The Economist said in November:(Nov 17th 2006 from Economist.com) “All Saints, All Souls, all sales. November has been the season of auction records. Both Sotheby’s and Christie’s have chalked up record volumes this month as well as record prices for individual works of art.

As Christie’s report it broke a record for sales in Asia, raking in $243 million Cdn in last week's sale of Asian artworks. (Dec 4 2006) How can the value rise so quickly? What fuels the run up in prices? One possibility could be that the financial institutions are willing to place a value on art and then loan money against it. That makes the expense of art some what more liquid. The Miami Herald said “Seeing a huge undeserved market of wealthy customers, financial institutions are finding a booming business in offering loans, lines of credit and advisory services to help clients buy pricey works of art and/or borrow against those they already own.

New York-based Citigroup has been a pioneer in the niche, launching its art advisory service in 1979 both to generate profits in its own right and as a way to cater to wealthy clients who bring other business to the bank. “Citibank realized that for a lot of clients, art made up a very large part of their overall net worth,” says Suzanne Gyorgy, director of art finance and business manager of Citigroup's art advisory service in New York. “We started using art as collateral for loans. We act as private curators for high-net-worth clients.”

However the price of art is affected by so many different factors that valuing it can never be an exact science. Forecasting the value of art seems to be impossible. Nevertheless, for those without an art savvy, art indices may well be the best way to assess trends before taking professional advice. However, the auction system, where prices are public and transparent, is still the best measure of art’s ‘true’ value at a given time. A very credible art index, by Mei and Moses, measures repeat sales since the 1950’s, and makes provision for fine art’s similarities, while ignoring unsold, unvalued works. It also leads to the conclusion that the more you pay, the lower your return, especially above $50,000. Beyond $2m, the average return was a loss. There is a limited supply of fine art below this price range available at any one time, Wise investors might do better to look at decorative art. This is an area that performed well for previous generations and now offers relatively good value.

Above all, if you’re going to invest in art, you should remember that it is these aesthetic qualities that maintain the arts’ future value. To develop such an appreciation and an eye for value there is no better action than to do the research, view all the available art, read the guides, then find out what you like and what your values are.

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• Art in St. Augustine
• Anthony Thiene
• Post Office Murals
• Emmett Fritz
• Lost Colony Artists
• A. E. "Beannie" Baccus
• The Highwaymen
• Florida Art Today
• An Abreviated History of Florida Artists