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FEATURE

August 25, 2016

By Candace Longfellow

WHY ART INVESTING IS BIGGER THAN EVER

why art investment is bigger than ever
As the largest living generation, millennials hold a ton of purchasing power and businesses are putting much of their energy into figuring out who they are and what they want. We’ve heard that millennials are less likely to visit the same travel destination twice, that they prefer spending money on experiences rather than products, and from music to restaurants to fashion, they’re on a never-ending quest to be the first to discover the next big thing. These days, their interest is turning to art.
While established collectors may turn to consultants or publications like Artforum for advice on what to buy next, tech-savvy millennials go straight to the source, following artists, curators and fellow collectors on Instagram and other platforms. A recent study shows that nowadays, 44.3% of people aged 18 to 24 discover art through social media. Rather than relying on connoisseurship or a vast knowledge of art history, young collectors are connecting to art on a more personal level — they’re interested in getting to know the artist and learning about their process.
why art investing is bigger than ever

Jeff Koons, Balloon Dog, $8,000

Market trends show millennials are not only changing how artists are discovered, they’re changing how art is sold, too. According to The European Fine Art Foundation’s annual report, in a year when overall sales contracted, online sales grew, accounting for $4.7 billion in trade or 7% of all art sales. Millennials prefer texting to talking on the phone and Tinder to meeting IRL, so it comes as no surprise they’re more likely to buy in an online marketplace rather than an in-person auction.

Christopher Wool, Assistant, $2,800

The catalyst for their purchases is different, too. Traditionally, the motivation behind art collecting has been aesthetic value. Collectors bought what they loved and kept it forever, passing it down to the next generation. Pieces were collected but rarely sold. With prices at the top tier soaring in recent years, however, the new crop of collectors is not necessarily buying art for its intrinsic value. Instead, they’re financially driven, viewing art as a capital asset or a long-term investment, hoping to turn a profit down the road. To learn more about how to invest wisely in the art market, we sat down for a Q&A with our Senior Fine Art Curator, Brittany Gersh. Read on for her investment tips.
why art investing is bigger than ever

Takashi Murakami, And then and then and then and then and then, $1,400

What medium do you recommend for the beginning collector?
Photography. It’s one market that is really, really growing. Photographs weren’t really sought-after until the last 20 years or so, partly because the concept of editions is kind of hard for people to understand. If something is a multiple, they think, “how is there value?” But there is — it’s still an original work by the artist, he just created 10 of them. There’s more appreciation for photos now and they’re also generally at a lower price point. You can still get an amazing photograph for $5,000 or less. It’s really accessible for someone who’s just starting to collect. 

Brian Hamill, John Lennon, $1,100

What are the best selling periods?
Modern art sales are staying consistent. Picassos and Calders never really go out of style, they’re a safe bet. Contemporary art is where we’re seeing the market grow most. It’s very easily traceable and easy to buy online. If you know who the publisher was, the edition size, there’s no worry about something being inauthentic.
why art investment is bigger than ever

Alexander Calder, Sky Bird, $1,200

How can collectors predict which artists will be lucrative in the future?
Look at who’s showing at galleries, pay attention to which galleries they’re working with, what other artists they’re showing alongside, and look at museum exhibits. Now, curators are showing artists like Picasso next to someone more contemporary — a combination of artists whose work is seen as having a conversation. It gives value and context to these up-and-coming artists when they’re placed next to someone more renowned.
why art investing is bigger than ever

Pablo Picasso, Birth of the Centaur, $1,175

Also, look at what major things are happening in the art world in the next few months or years. If you have something by an artist who’s going to be featured in the Whitney Biennial, for example, that will probably fetch a nice price. Do research, get to know the market for different types of work. All these artists have peaks and valleys throughout their careers so you have to look at a specific piece and know how it fits within their timeline to gauge value.
What other tips do you have for new collectors?
We’re seeing tons of sales for pieces that are well done, have a contemporary feel or there’s just something about them that taps into the cultural zeitgeist, that you may or may not make a huge return on. The bottom line is you’re going to be living with this piece and looking at it every day. Even if you’re planning to flip it, you’re still going to spend some time with the piece so it’s important that you buy be something you enjoy.
Ready to diversify your portfolio? Shop our curated collection of fine art here.