Before considering art as an investment and making the decision as to whether or not to begin an art collection, or add one to your current investment portfolio, an important question to find an answer to is: why invest in art?
There are many good reasons to invest in art and in this article, we take a look at some of those reasons in depth.
As well as being easily accessible, art has a lot of unique benefits and multi-faceted value. It’s an asset that you can resonate with as well as consume and enjoy, it makes an impression by adding a sense of luxury and prestige to any space it’s displayed in and has great social value, driving conversation and encouraging dialogue.
Whether you’re starting or diversifying your portfolio, there are also the financial values of art to consider, such as it being a stable asset class that regularly outperforms stocks whilst acting as a hedge against inflation.
The fact that right now is the best time to invest in art is yet another great reason to consider, whilst digging a little deeper into the aforementioned reasons.
Reasons To Invest In Art
The beauty of looking at the reasons to invest in art is that any of these can be taken alone and stand out as a good enough reason to make a purchase and begin your art investment journey; but when you look at them all together, it becomes very clear that it’s an ideal choice.
It’s easily accessible
Once upon a time, the art market and art investment was available only to a select group of individuals, usually those who already had a considerable amount of wealth to begin with. Nowadays, however, this has shifted and art investment has become easily accessible and available.
The online world has aided this change in many ways, offering access to a vast assortment of artworks at a variety of price ranges, and simplifying the means of finding expert art investment advisors.
There are also a number of flexible payment options available, making artworks more affordable than ever before.
It’s something you resonate with
Art stands apart from most other forms of investment inasmuch as you can resonate with it and form a strong emotional connection with it.
In fact, resonating with and loving the art you invest in is one of the main criteria for art investment.
When you combine your love for a particular artwork or collection with informed decisions based on research and expert guidance, you’ll have the added benefit of having an asset that you can resonate with and over time, you’ll develop an even stronger connection to, ensuring that every single penny you part with is a worthwhile investment.
It has multi-faceted value
Art has much more to offer than just monetary value. It also has aesthetic, emotional, intellectual, cultural and social value too.
There’s an extra sense of reward and satisfaction to be had by displaying your art collection, whether that’s in your home or your workspace, you can enjoy the many benefits and values of your investment portfolio.
One of the major benefits of art being an investment with multi-faceted value is that it makes it much easier to sell on if you decide to part with it in the future, as those same values that appealed to you will appeal to other collectors too.
It can be consumed and enjoyed
Unlike other types of investment, art can be consumed and enjoyed without decreasing in value as a result of doing so. You can make the most of all of its values and benefits and not have to worry about the financial value dropping as a result.
Contrast this with other forms of investment such as whisky, which upon even the smallest amount of consumption, the value is decreased.
If the time comes that you decide to part ways with your collection after many years of enjoyment, it still holds onto its value enabling the next owner of the art to consume and enjoy it equally as much as you did.
It makes an impression
There can be no doubt that fine art will as add a sense of luxury and prestige to any space it’s displayed in, making an impression and inferring status to its owner.
Interior designers will often design a space around a piece of artwork or a collection, projecting the power of the art and anchoring the space; art is a unique artefact because it has the power to set the mood and atmosphere of the space that it’s in.
Also, with investment-worthy art available that suits all budgets, you don’t need to be sitting on a large pile of wealth in order to make an impression with an art collection and add a strong sense of luxury and prestige to your space.
It has social value
The fact that art can be evocative, have a narrative, provide a sense of escape, stir curiosity and drive interest makes it the perfect tool for starting a conversation and encouraging dialogue with your guests or clients, stimulating both imagination and intellect.
Another of the social values associated with art in general and especially with art ownership is the social commentary that can be observed or made, using art as a platform for expression.
It diversifies your investment portfolio
Art is the key element to a diversified investment portfolio and should never be viewed only as an alternative form of investment, especially with the long-term goal of maintaining revenues as well as boosting capital.
Equally, if you want an investment portfolio that only contains an art collection, that’s also a feasible way to invest and set yourself up for future profits.
Art is reasonably easy to understand as an asset and exists in the portfolios of most successful investors.
It’s a stable asset class
There’s always a buyer for art and the art market has proven its resilience time and time again, consistently weathering the storms of uncertainty and instability in other markets.
Just looking at how the pandemic affected the art market is a great example of just how resilient it is.
The long-term data analysis shows that when compared to any other asset class, art has the closest correlation to gold; making it a very effective investment choice for maintaining the value of your current wealth as well as offering the potential for future profitability.
It regularly outperforms stocks
As an asset that carries the benefit of continuous market growth, art regularly outperforms stocks and shares and whilst the stock market often rises and falls, the art market has consistently demonstrated its stability, as mentioned above.
Also worth noting is that from 1995 to 2020, contemporary art has seen fewer losses than stocks with recorded losses in only 4% of cases over 3 year investment periods.
It’s a hedge against inflation
Historically, art is an asset that isn’t largely impacted by inflation of devaluation in currency or market volatility; making it a huge reduction in risk for investing.
Whilst any form of investment carries risk and art isn’t entirely an exception to that principle, the fact that art does act as a hedge against inflation is a great reason for considering it as an asset and then conducting some research on the art market.
Begin Your Art Investment Journey
Now that you know why art is a good investment, a logical next step would be to learn more about that process and how you can begin to put together a collection of investment-worthy art that you can enjoy now, and potentially profit from in the future.
At S&P Gallery we specialise in providing the highest level of confidence in the art market and art investment.
If you’d like to take the first step in your art investment journey, or even if you’re looking to expand or diversify your portfolio, feel free to contact our expert art brokers for the finest professional art investment guidance.
To learn more about the benefits of investing in art and investing with S&P Gallery, as well as our market performance some of the returns realised from our clients, you could also download our free art investment guide, which is packed with valuable information and insights.
Featured Image: Miss Aniela - Girl In A Golden Geyser (Cropped)