In general, investing is one of the best ways you can use to retain the value of your funds. If you decide to keep all of your money in a bank account and do nothing with it, over time it will start to lose its value due to inflation. So you must be wondering, how should I invest my money? One of the most popular ways is investing in stocks. This, however, does not mean it is the only way. There are a lot of alternatives that you can choose from. One of them is a fine art. This might seem weird at first, but over the years, investing in fine art has become a lot more approachable for the average investor. If you have funds to spare, and you are looking to invest in something, fine art might just be the thing you are looking for. So, without any more delay, here is what you need to know about how to invest in fine art.
The Basics of Investing
Investing in fine art is not as easy as one might think. It can definitely be a tricky question to answer. In general, if you decide to buy a piece of fine art and you only hope that the price of the piece will rise, you are setting yourself up for failure. There is a lot of investigating and informing you need to do beforehand. Before you do anything, finding the right artist is crucial. What you are looking for is an artist whose art will have a high chance of increasing in value over a short period. This is a lot harder than you might think. In general, the only art pieces that drastically increase in value fast are the ones from an artist that have passed away. Getting your hands on something like that can cost you a lot of money, some pieces even go for as much as millions of dollars.
With that out of the way, let’s say you decided on getting a fine piece of art. You acquire it and it increases in value. The problem that you might have at this point is if you want to sell it. Selling an art piece is not easy. The art market does not possess a lot of liquidity. What this ultimately means is that even if your fine art gains value, selling it right away is almost impossible. Usually, you will have to wait for a long time before you can sell it. Additionally, do not forget about the fees you will have to pay to a broker or to an auction house when you decide to sell.
By deciding to buy a piece of fine art, you must be prepared to take care of it. Do not forget that, unlike stocks which are intangible, you are buying art in physical form. That means that you will have to carefully work with it. Do not take this for granted, as possessing fine art takes a lot of work. First things first, depending on the art, you will have to store it properly. Things such as temperature, direct sunlight, and humidity can damage the art piece. Because of this, an art piece can lose a lot of its value over time. If you do not have the necessary space or time to take care of it, a great alternative is to hire someone else. There are certain companies that specialize in this field. For a monthly fee, they will take care of your art piece keeping it in perfect condition.
Maybe you decided against buying a whole art piece for yourself. However, this does not mean you will have to give up on investing in fine art. What if we told you that you can still invest even if you do not want to physically own the piece itself? You can do just that through art funds. Through art funds, you can invest to only own a part of the art piece, a small percentage if you will. Basically, art funds find a number of suitable investors who will all own a small piece of the art. The job of the art fund is to keep the art piece in perfect condition so it can be later sold for a profit. They will start promoting the art piece in hopes of finding a buyer. Upon selling, every investor gets their share so everybody is happy.
Is it a Good Investment?
With everything we said so far, we believe that investing in fine art takes a lot of patience and knowledge. Because of that, it is not suitable for a lot of investors. Finding the best fine art to invest in can be a daunting task. However, if you know what to do you can certainly make a profit with it.