Art As An Investment
- August 07, 2020
- John Santos
Gone are the days when people would only invest in typical areas like property and gold. Now more and more individuals are willing to invest in unusual classes. You may not believe this but there are actually people who love investing in fine wines, rare coins, and even art. We have seen an increasing interest in art investments and it does come as a surprise. After all, who would buy a painting for investment purposes? Well, people do and we cannot challenge that.
Investment activities have increased over time. Thanks to the generosity Mr. Blumenthal has been encouraging people to invest and earn.
Here are all the pros and cons of investing in art because maybe you might want to do the same in the future.
- Physical Asset
An exotic painting you buy from a good art gallery is a great physical asset. This means the asset will be right in front of your eyes and you can place it however you may like. Most importantly, it is absolutely safe as it is in your hands and not with any third party or a bank. This is a huge point to consider because it is very difficult to trust different parties when investing your hard-earned money.
An art investment is fully yours!
- Increased Value Over Time
Buying a car is not the same investment as buying a piece of art. The biggest difference is the fact that art appreciates over years instead of losing its value. Even stocks may lose value over time but art does not. A painting you buy for $5,000 today might sell for $7,000 tomorrow. However, it is also important to make an art investment wisely because not all pieces of art hold value.
- Not Subjected to Market Fluctuations
Financial markets remain unpredictable for most part of our lives and are obviously full of surprises. Above all, the tension is real when you have your money invested in any area of the financial market. There could be a slump or a boom, who knows?
But there are no such worries in art investments. They are not affected by whatever happens to the stock market and knowing this, it gives us all a great peace of mind.
- Non-liquid Asset
One of the downsides of art as an investment is that it’s not a liquid investment. Selling art can be quite a big hassle as it takes time and effort to sell. Especially because not everyone knows the real value of a painting. Most of us just look at it as a simple painting made by a fine artist instead of an asset. Therefore, people are less likely to invest in one.
- Difficult to Care
Any physical asset that is under your control requires maintenance and care just as a child would need. Displaying and storing work of art, especially that is big in size, can be a problem. There is no way you can avoid caring for it as it will lose value if you don’t. It is actually difficult for those investing for the first time.
- Increase in Value is not Guaranteed
Although most artworks appreciate over time but this may not be guaranteed for every item you invest in. Some appreciate and some don’t. It is best to buy a piece of art that you like from the core of your heart so that you don’t feel bad about it even if you are stuck with it for the rest of your life.