Since the 2008 economic crash, the investment world has been a challenging one – and, for British investors, Brexit certain hasn’t helped matters. But there is one area where business is definitely booming: investing in art.
The recent Global Art Market Report 2019, compiled by Art Basel and UBS, found that art sales reached an estimated $67.4 billion in 2018, an increase of 6 per cent on the previous year. What’s more, another survey by UBS in 2017 revealed that 35 per cent of high net worth individuals are buying art, and last year’s Wealth Report, by Knight Frank and Douglas Elliman, discovered that the have-yachts are spending more money on it than fine wine. Clearly, investing in art is the thing to do right now.
In particular, putting your money into art instead of traditional stocks and shares is attractive for investors drawn to the potential for low risk and high returns. It’s also great for those who want to put real conversation-starters on their sitting room walls – with the bonus that they could make a tidy profit in a few years’ time.
And, while you might not have $450 million to spend on a Picasso (the price that Mohammed Bin Sultan paid for the artist’s Salvator Mundi back in 2017, setting a new auction record), there’s still ways to invest in art on a lower budget. We spoke to London-based art dealer and curator Jean-David Malat to get the lowdown on why art is such a great investment, and what prospective buyers should look for before getting out their credit cards.
[The Jackal] Why is art such a good investment?
[Jean-David Malat] Art is a phenomenal and secure way to invest. If you find yourself buying the right piece, you are sure to get your money back and more. It’s also a fantastic way to enhance your culture, your knowledge, and your social circles. It’s a win-win in many ways. It has served as an investment for many generations and only continues to grow as a vessel for securing and growing your assets.
[TJ] What kind of art makes for a good investment?
[JDM] The most important thing when buying art is to buy what you love. Only then can you address the question of whether it is a good investment. There isn’t a ‘right’ kind of art as such, but a good investment will usually depend on the artist’s credibility, which galleries and dealers are backing them, where they have exhibited in the past and, if available, their auction track record. A good investment can also sometimes be sheer luck; something you love that everyone ends up loving too, and then you’ve hit the jackpot.
[TJ] How can you spot an artwork that will go up in value?
[JDM] Technique and concept are behind any emerging artist’s works. How much thought and work has gone into the painting? How does it differ from other artists around? What is particularly new about this piece that I have not seen anywhere before? These are all questions that one should ask themselves as they see an artwork. It’s also really important to see where the work is exhibited, as a good gallery will be backing good artists no matter what.
[TJ] What are the risks of buying art as an investment?
[JDM] With any investment one makes there are risks involved. One can never be 100 per cent sure that what they buy will go up in value. Anyone telling them otherwise would be foolish. All you can do is due diligence: ask as many experts in the field what they think, check in with yourself that you really love what you’re buying, and then you’re ready to buy. Accepting that there is a risk involved in your investment and that challenges may occur will only make your purchase smoother and easier on your conscience.
[TJ] What kind of art would you advise people to invest in?
[JDM] I advise buying that you love first and foremost. Secondly, what a trusted advisor recommends and thirdly, a mixture of confirmed artists where limited risk is involved, and emerging artists where the potential for profit is large.