Investing in art – Investors’ Chronicle

The best motto is probably to ‘buy local: sell national’. Bargains can often be had, if not at car boot sales, then at provincial salerooms. Pick a sparsely attended auction in the middle winter, wait until the resident dealers are bored, and a cheeky bid for an interesting piece can often yield something that could be sold relatively quickly at a handsome profit in an auction or through a dealer in London.

What this presupposes, of course, is that you have a skilled eye and the expert knack for picking the one decent piece out of 300 lots of second-or-third rate ones. But this can be acquired.

The antiques market may be less well-documented than most, but ceramics in particular are always popular collectors’ items and relatively easy in terms of their space requirements, to store. Local collectors’ fairs often have a range of items to suit most pockets. You just need to read up on the subject first and specialise.

For those with more space, classic English furniture is rarely out of fashion and often sought after by foreign buyers. And keep a look out for films and other aspects of popular culture that might stimulate interest in a particular genre.

Academic studies of art market are more numerous and the consensus is that quality works of art will show an annual real return over time in the region of 4 per cent.

Encouragingly for most of us, studies like this also show that low-priced art (pieces priced at less than £1,000) performs appreciably better than ‘old masters’. Play it safe here by going for a few good pieces rather than a lot of mediocre ones and go for artists recognised in their field rather than the new hopefuls who may crash and burn.

You might not be able to afford a Van Gogh or a Reubens painting, but old-master drawings, for example, can often be had for relatively modest prices.

In the end, with both art and antiques the same rules apply. Pick a few high-quality pieces that you like and buy local where you can. Hunt for bargains in local auctions, art and antique shops, charity shops, car boot sales, and collectors’ fairs. Sometimes the most surprising and unusual items turn up. Above all, buy what you like. You may have to sit on it for some time before you can realise a profit, so the experience may as well be an enjoyable one.

The Contemporary Market

Newer mediums, such as photography, are increasingly recognised as a legitimate art form and the serious collector market is growing. Go for the earliest pieces or works by iconic artists such as Man Ray.

Even dowdy-looking pieces acquired in local sales can often be improved by getting an expert to clean and reframe it. This usually doesn’t cost that much and can enhance the value of a piece considerably.

Limited-edition prints are another area attracting interest. Again, the trick is to find recognised artists in the field and to go for editions that have low numbers, preferably 50 or less. Some of the big-name artists, like Andy Warhol for example, have work that can be acquired at relatively low cost at contemporary art auctions. Avoid new names in contemporary art, though. These are the equivalent of penny shares in the stock market – you might have an outside chance of picking the next Damien Hirst, but for every example like that there may be 100 who sink without trace.

Momentum is all. An interesting indicator of artists whose work has this elusive quality is to go to the opening of the Royal Academy Summer Exhibition where editions of work on sale will exhibit a row of red dots as the edition sells out. Look for those artists whose work seems popular and where an edition looks to be almost ‘sold out’. Quick decisions are necessary here, though others may be up to the same game.

Finding advice

If you’re serious about committing large sums of money to art investment, it’s probably wise to consult an expert. Most private wealth managers, such as Barclays, have divisions that can advise clients on what and when to buy. But if you don’t like the idea of investing thousands into a single painting, and pinning all your hopes on it, consider investing in an art fund such as the London based Fine Art Fund (contact T: 020 7647 0915).