There are a few reasons why putting money and effort into your private art collection might be the right choice, especially now.
The past 100 years of machine creation and innovation, to electricity and computerization have brought us to the Fourth Industrial Revolution. As a result we enjoy a working level of transparency, sourcing, sharing, and buying different than just a decade ago with almost no gaps in time and space. One that presents us with a smorgasbord of global objects and there seems to be a silver-screen-sized spotlight on the arts.
Clearly, the opportunities to easily access a multitude of works, connect with artists, and source galleries, fairs, and auctions are abundant. From high end to lower end, market segments have changed.
Traditional institutions, like Christie’s and Sotheby’s, have employed technology to accommodate their growing collector base, one that has proven to be comfortable with acquiring art on the go and via devices. This includes Sotheby’s acquisition of Mei Moses (SMM) as an analytical tool to assess and understand the market better. These changes have, in part, buoyed confidence. In fact, we see that investing in art as an asset class or private collection continues to grow in spite of Brexit and the U.S. election that tended to tighten wallets.
The prodigious numbers are quite hard to ignore too. The dollar signs wafting from the art market are a magnet to both the curious and savvy. It warrants more than a bit of merit that the art market has grown unabashed, up 212% this past decade. And many are benefiting as the burbling art arena boils higher. Even as the market decelerated this past year, TEFAF’s 2017 Report shows global growth up 1B now reaching 45B.
Collectors are increasingly willing to share their compilations in public spaces. Private collections have been displayed publicly for decades, but as of the past decade the practice has rocketed upward becoming a cornerstone for established and new art market sectors.
Single owner collections with an intriguing pedigree or captivating storyline are frequently gaining mega attention. Owners are experiencing celebrity-like status as tastemakers and curators with their highly anticipated unveilings – some moving collections to their own private museums and showrooms. Overall, these changes are creating a celebratory and philanthropic buzz.
In light of a revolutionizing art market, there are several trends that have emerged for collectors going forward in 2018. I’ve combined them with the 7 moves below:
Diversity – Diversifying is one way to raise value. Currently, Impressionism, Post-War and Contemporary art remain strong in the market. Chinese fine and decorative arts are also highly sought after as well as Scottish Art to name a few, but following trend is only best if it speaks to your story, reflects your taste, or the historical preference and style of your collection.
Risk – Typical returns fluctuate 1% to 19% as reported in WSJ by art expert, Michael Plummer of ArtVest Partners, LLC. So, it’s best to view monetary reward as only half of the return with social capital and personal satisfaction being the other. Since monetary valuation is only realized upon liquidation, it’s key to revere emotional, social and aesthetic currency as a unique and valuable form of return. Net risk is then reduced according to how the risk is perceived.
First Claims – Beginning in 1964, Don and Meera Rubell’s weekly purchases from unknown artists culminated years later in their highly coveted compilation. With aging private collections becoming hefty exchequers of keen aesthetes, claiming firsts can become great long-term investments.
Unique Truth – Today, collections are answering unique truths about art. As the steward of your collection, you play a part in that truth which is a historical or aesthetic fact you explore through your collection. That truth helps create value. In this way, the sum of your individual pieces remains less than the total matured value of the collection.
Education – Not all collectors are astute connoisseurs. Some begin on little knowledge and it can work well for the collector especially when the goal isn’t monetary. However, due diligence and acumen are priceless when building for value and avoiding fakes or forgeries. Today’s collectors cultivate both of these skills.
Personal Representation – Collections are a window into an individual’s artistic acuity. This is a deviation from investments that solely aim for profit. Art collections are a hybrid of carefully cultivated oeuvre and personal taste and the best collections highlight as much.
Do What Works – Art collections today range from hobby-like to asset-class-like. Whether you use an advisor, tech tools, a historian, your own intuition or a mix of methods, do what works and the return will reflect your collection design.
Paula Soito is an arts industry writer and official judge for Art Market Magazine’s Top Emerging Artists – Gold List in collaboration with Venice Biennelle. As founder of Artsrow.com, she’s highly dedicated to highlighting the works of American artists around the globe.
Art: A Growing Asset Class (https://www.forbes.com/sites/advisor/2016/11/07/art-a-growing-asset-class/)
Art Investment Funds: The Basics (https://itsartlaw.com/2015/05/19/art-investment-funds-intro/)
Inside the Private Museums of Billionaire Art Collectors by Michael Shnayerson (http://www.townandcountrymag.com/leisure/arts-and-culture/a9124/private-museums-of-billionaires/)
Marta Gnyp, an art adviser and author of The Shift: Art and the Rise to Power of Contemporary Collectors – Town&Country)
Specialists Speak: 2017 Trends and Predictions in Collecting (https://www.invaluable.com/blog/specialists-speak-2017-trends-and-predictions/)
Private Collectors Get Into the Museum Business (https://www.nytimes.com/2015/09/21/arts/international/private-collectors-get-into-the-museum-business.html)