Works of art are often considered collectibles for rich people, especially rare works by famous artists. This assumption is not wrong, because rare works are priced very expensively, for example a painting by Leonardo Da Vinci entitled Salvator Mundi, the price reaches $450.3 million.
Thanks to its value which can reach fantastic figures, works of art are also often used for investment. Art lovers hunt for rare works of art with the aim of reselling them in the future at a higher value. However, unlike general investment instruments, for example shares, gold, property and the like, works of art do not have many fans. People who are willing to buy a work are usually people who enjoy art, while there are not many such people, which makes the art market have low liquidity.
But, even so, as an asset, works of art have several advantages compared to traditional assets such as shares, property and others. These advantages include:
1. No Price Depreciation
Believe it or not, physical works of art almost never drop in price. Even if it has been on display for a long time, the value of the work will actually become more expensive. Because even though works of art can be used as investment instruments, people who buy works of art basically buy them because they think it is good. And they want to have it to satisfy their own desires. Therefore, when other people want to buy it, the owner of a work of art will definitely set a higher price, or even the person who wants to buy it will offer a high price. Even if the offer value is not high enough, the owner of a work of art will not hesitate to reject the offer.
2. Not affected by economic conditions
Works of art are assets with fundamentals that are not related to the economic situation, both on a national and global scale. The fundamentals of a work of art lie precisely in the profile of the artist as well as the meaning, reasons and goals of the artist in creating the work. Therefore, no matter how bad or good the global economic conditions are, the price of a work of art will tend to rise.
So how do you invest in art assets?
Technically there is no difference between investing in works of art and traditional assets. The method is the same, namely by buying works of art that have the potential to increase in price in the future. The problem actually comes when choosing works of art that have this potential. Because there are no complete parameters to assess whether a work will have the potential for improvement or not in the future.
Art collectors or art connoisseurs usually tend to buy works that they like and really want. Generally they don’t care about the future value of the work. However, potential works of art usually have two criteria, first is rarity and second is the popularity of the artist who created it. Most expensive works are rare works that are no longer possible to make, especially when the artist has died. Apart from that, works that are highly valued are often associated with the names of popular artists, such as Leonardo Da Vinci, Willem de Kooning, Paul Gauguin and so on.
So, if you want to invest in art assets, you should pay attention to these two aspects, rarity and the artist who created it. Apart from that, always be careful when choosing works of art, because there are many duplicate works of art that are difficult for the layman’s eye to distinguish. These works may look the same visually, but their financial value will be much different.
Investing in works of art is an attractive way to allocate your funds, which can provide both aesthetic satisfaction and the potential for significant growth in value. However, for some people, this concept may feel foreign or complicated. For the layman, let’s explain in simple terms how you can invest in art. First of all, you need to understand that art has intrinsic value and market value. Intrinsic value is the artistic or aesthetic value you find in the work of art. This is what draws you to a work of art. Meanwhile, market value is how much people are willing to pay for the work of art. Investing in art first requires understanding what type of art you like, be it painting, sculpture, photography, or other art. Explore local art galleries, museums or art fairs to identify styles and artists you love. This is an important first step in the process.
Once you find a piece of art you like, you need to do some research on the artist. Consider the artist’s reputation, sales history of their work, and whether they have potential for future growth. This information can help you determine whether the work of art is a good investment. Next, pay attention to the physical condition of the work of art. Make sure the artwork is in good condition and not damaged. Works of art that are well preserved tend to have higher value. You must also verify the authenticity of the artwork with an authentication certificate or valid documentation. Additionally, consider your budget. Investing in art can be expensive, so determine how much money you are ready to allocate. You can choose between more affordable works of art from young artists or works of art from well-known artists at higher prices.
But, isn’t there now a blockchain-based digital art market?
Yes, currently there is a digital art market. Many works are sold in NFT form through this market. Even if you want to invest in artwork via NFT, two things (rarity and popularity of the artist) you still need to consider. Because NFTs tend to be more volatile than traditional works. And most of the buyers are not art lovers, they tend to buy based on the euphoria and interest that arises from being consumed by the marketing strategy carried out by the NFT creator. In fact, if you explore the NFT market deeper, you will find that real artists with philosophical works tend not to “sell”.
But, of course it is legal to invest in NFT works of art. It’s just that you should still use the parameters “rarity” and “popularity of the artist” when buying a work. Because both are fundamental factors that are usually possessed by works of art that are highly valued.
