Art As An Investment

Discussion

Art is a wide area of activities by humans that creates visual, sounds, that express the author’s thoughts or imaginary ideas or practical skills with the intention of appreciating the beauty and their power. Examples of artwork include drawings and paintings (Senge, 1999, p. 57).

The world of art has grown really big in recent years. The art sales in 2014 passed $60 billion, up to two thirds over 2009 sales (Danaher, 2014, p. 549). There is an investment that has been opened that uses the existing market data and the analysis from the previous market record. The art investment is called Arthena.  It has opened up crowdfunding equity to a wide number of people. It helps investors make reliable amounts of money from the art. Basing on the research done at Stanford, the number of good art sales, the standards used in funds selling, the median yearly rate of returns are of up to 10% (Bruton, 2003, p. 241).

Several people have a myth about investing in arts. The art industry has always been kept away from the middle-class people from venturing into the business. You’ll find a lot of people saying that they don’t know about art, art is only for rich people. The ignorance can be eliminated by doing a lot of research and gaining knowledge and skills about the art industry (Benjamin, 2008, p. 18). The research done on the art market shows that the art price has increased to more than 1000% since the past 40 years (Müller, 2002, p. 171).

An investor who is interested in art has several options to venture in. what comes into our minds automatically when art is mentioned, is painting. There is more to it and it includes styles, media, and classifications. Zatista is an online art gallery who deals with original arts of different types includes; prints, videos, drawings, paintings, photography, mixed media, digital and sculptures. Art is classified into original and copies (Donders, 2006, p. 1089).

1. Original arts – an original art is an art that is unique on its own. It is what most of the investors buy during speculation in the sector. It is a rare artwork that is worth a price.
2. The prints- a print is a copy and it is considered as artwork which has value. Several techniques are used during production of a print. It is done to give it clarity and an effect that is seen which gives rivals to the original. It is for investors with limited resources or funds where they can start their collections. Autographing a print in a margin tends to increase its value.
3. Giclees- Its resolution dominates the art market as compared to other prints. The fact that it’s the best today makes it pricier giving the investor a reasonable profit. It is classified by many investors a museum quality. It even gives an authenticity certificate. Giclees is also a copy and not original(Buxadó, 2015, p. 351).
4. Reproductions- they are also known as posters. They are not original rather copies of the original work lacking limited run of printing. They are not so valuable as far as investments would go through, they are good for the art collectors who are on a budget.

There are some factors to consider before buying the arts for investments. Having knowledge of the difference between the primary and the secondary market is a huge step before investing in the artwork. Skills on the targeted population and the style should also be a priority. The Primary market is a market that sells original artwork which has never been sold anywhere else before contrary to the secondary market which sells artwork that has been sold before in the market (Mei, 2002, p. 1660). The steps of buying artwork include;

1. Doing research on the artist- an artist that has been in the industry for a long period of time and has fascinating past story gets more income among the people buying. The following information about the artist should be research; the previous exhibitions, age, awards and the level of education. Mostly, this information is generated from the biography of the artist.
2. Artwork research- understanding the type of art is a crucial requirement before choosing on the collection you would like to buy. An authentic art should be acquired. Finding an authentic product is not a difficult task more so if the artist is alive. The problem arises when the artist is dead. The appropriate way to handle this is by obtaining an authenticity certificate from an expertise, mostly the artist’ foremost authority.
3. Dealer investigation- art market that keeps their information confidential makes it very difficult to know the reputations of some brokers and dealers, more so the ones that are still small. Doing research on gallery reputations tends to be easier.

1. Auctions- auctions are places where artists are sold. They can really be interesting places to be especially when more than one bidder is involved and, in this case, they want the same art. An art that is appealing to the eye and you really want to buy it because you love it, may justify a higher price. Investors and collectors should check value, weigh prices, check conditions and adjust the bids appropriately. Examples of auction houses include; Christie’s and Sotheby’s. apart from the two auction houses, there are other fine and small auction houses(Marcus, 1997, p. 31).
2. Galleries- a gallery is a more relaxed place as compared to auction houses. It helps evaluate, decides and views your purchases. Most galleries deal with the primary market which involves new artists. Some also focus on the secondary market involving artworks that have been sold before. There are also galleries who deal with both the secondary and the primary market. Galleries are an important factor since it works with the artist by helping them to grow, perfect their work and help them realize their efforts in the artwork.
3. Art fairs- the novice can develop an eye for the artwork through fairs. Everyone can find what they want despite the level of expertise. Art fairs provide services such as browsing, mingling with other art lovers, question asking, price comparisons, and evaluations. The dates for local fairs can be found in the newspapers or the internet.
4. Online- artworks are sold and bought on the internet. The online platform has helped in removing congestion in the auction houses and on the galleries. When buying artworks on the online platform, one should ensure that gallery with a good reputation is behind the website before confirmation of buying.

1. Investing in the art appreciates in value over time. If the collection is chosen appropriately, the artwork can bring a lot of profit even more than what you paid for.
2. Art is a physical asset which tends to be an additional factor to the investors. The fact that it is a physical asset makes investors secured with their own products. It reduces issues of trust for the investors who do not trust investment firms with their products. The art management, storage, and care are all in the hand of the investor(Mitchell, 2003, p. 454).
3. It has a value to enjoy- most of the investors are collectors before they become real investors. Appealing arts can be displayed for people to see and can really appreciate with time.
4. The artwork has no market fluctuations. Corrections on the stock market, volatility, and finances do not exist in the world of art. This is one of the major advantages of putting investments on arts(Mendelsohn, 2004, p. 903).

1. There is a barrier to entry into the world of art. The main barrier that has really affected the art world is the lack of knowledge and skills about it. In order to invest in the stock market, one needs to check on the earning reports, the company you want to acquire stock from and look at the fundamentals. Before making any purchase, a lot of knowledge about art wort is a crucial requirement(Bygrave, 1988, p. 140).
2. Art is not a liquid asset.  It takes sometimes, marketing effort and planning to achieve the best price of the artwork.
3. Difficulty in caring for the assets. Bearing in mind that artwork is a physical asset, this makes it difficult to take care of. It becomes difficult in terms of storage, maintenance, and artwork safety in order to retain its value. This factor can greatly discourage investors who are venturing into the business for the first time(Obernberger, 1998, p. 42).
4. There is no guarantee that the value will appreciate. Not all the artworks are guaranteed to doubles the price of what you paid for.

Types of art

 Taking care of the art.

The tips of taking care of the artwork are the obvious methods though they need to be followed appropriately to ensure that the artwork appreciates or rather retains its value (Killeen, 2003, p. 259). The following includes ways of caring for art products;

1. Cleaning hands before touching the artwork is a crucial requirement. Handling one piece at a time prevents the artwork from accidents such as falling down which might lead to breakage. The artwork should be held using both hands and avoiding the painted surface.
2. Dusting and cleaning the artwork. It is done by use of a soft cloth and a brush to wipe the dust. Wiping does not require pressure hence it should be wiped slowly and to one direction.

• Storage -artwork should be kept away from direct sunlight, away from heat sources such as fireplaces and damp sites such as basements. Such factors may degrade the value of the artwork. Storing several paints for long periods of time appropriately should be done on a painting rack.  It hinders contact between the paints reducing the chances to get damaged.

Arts can be sold individually or sold on an entire lot. This process can be very demanding and time-consuming when starting. The gallery and auction houses should not be dependent upon to do this. One should have professional qualities to approach clients confidently and market the art. Before approaching a venue, one must take into account the price of the venue (Lucia, 1999, p. 47). Another venue that is growing really first but has its own implication. Online transactions can be very tricky since one might end up losing money if they do not check venues properly (Ashenfelter, 1989, p. 27).

1. The art world market does not have a middle market. The prices of art are not predictable.
2. Finding a perfect distributor such as the galleries is very difficult.
3. It is difficult to determine the market needs.

Generally, artists need to realize that they need to seek permissions from photographers whenever they use other people’s images as a reference to painting. Most artists do not upload their artwork on the internet simply because they fear that people will download and use them on their home pages. Other people may print the images and sell them.

In conclusion, not every person can invest in art. One of the main disadvantages being that there is no guarantee of value appreciation of the artwork. Acquiring knowledge and skills about arts before venturing into it is a crucial requirement. The relationship between arts, artists and the surrounding/ society is the main point that the recent studies surround. The society needs artist and art not only for enhancing their culture but also for the humankind development. An artist relies on people and the surrounding environment in one way or the other. The appearance of an artist in the art world is normally after the painting have been shown in an exhibition. The artist future is greatly dependent on the success of the exhibition. The first exhibition indicates that the artist has ‘arrive’. The number of the painting sold and at the expected price in the exhibitions measures the success of the artist.

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