Artistic Ascension: Beginner's Guide to Art Investing

Occasionally, I will publish deep dives on one particular aspect of the art market. This is the first article of that kind, and it sets the foundation for everything that will come after.

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Art investing may seem out of reach, but with passion and the right guidance, it can be an exciting and rewarding journey for any art lover. This article will walk you through everything you need to know to begin your art collecting adventure.

Art investing - purchasing art with the goal of financial return - often brings to mind images of multi-million dollar paintings sold at fancy auction houses.

Image Credit: ARTnews and Christie’s 

In my article about Winston Churchill, I mentioned Brad Pitt’s purchase of Churchill’s painting Tower of the Koutoubia Mosque as a gift for Angelina Jolie in 2011, which she then sold in 2021 for nearly $11.5 million. While sales like this make headlines, the downside is that they create the misconception that art investing is only for the ultra-rich.

In reality, the art market encompasses a gamut of levels of financial investment. More importantly, the art market is massive, valued at over $1.7 trillion in 2021, and has outperformed the S&P 500 since 2000.

Source: Artprice

Unfortunately, because most people opt out of the art market, they miss out on benefiting from its growth. At the same time, emerging artists don't get the buyer volume and support they could have if art collecting was more mainstream.

Vincent van Gogh sold only one painting during his lifetime, living in poverty for much of it. His financial dependence on his brother Theo was a source of deep guilt and was one of the factors that contributed to Van Gogh taking his own life.

Image: Vincent van Gogh, The Poor and Money, 1882

Sadly, too many living artists today face financial struggles similar to Van Gogh in the 1800s. Instead of waiting to recognize the artists when they are no longer alive, we can now invest in emerging artists for amounts that are accessible to more people than may seem possible.

Art as Investment

Vincent van Gogh, Pablo Picasso, Andy Warhol are all examples of blue-chip artists. 

These are well-established artists with a solid reputation for creating art that consistently increases in value over time. The term "blue chip" is borrowed from the stock market and is used to describe stocks in reputable and profitable businesses. 

Blue-chip art is considered a safe option for art collectors and investors, as it is known for selling for high prices at auction houses and becoming a more valuable investment over time.

According to Yieldstreet, an alternative investment platform, for an artist to be considered blue chip, their works must consistently sell for over $500,000, have annual sales volumes exceeding $10 million, and have been selling at auction for at least a decade.

However, don’t assume you need $500,000 to invest in art. Far from it. You have several options at very accessible price points for collectors with much more modest budgets looking to get started.

Art Advisor, Adam Szymanski, PhD, shares 3 possible options.

1. The Print Market

Thanks to the print market, it is possible to acquire an edition by one of the most recognizable names in contemporary art for $5,000 to $20,000. At the 2024 International Fine Print Dealers Association Fair in New York City, I saw prints available for as little as a few hundred dollars.

Prints can appreciate substantially in value over time. They also retain value well. For example, David Hockney has been a top print market performer, with his prints seeing a compound annual growth rate (CAGR) of 16% over the past five years.

Source: MyArtBroker

Print sales have surged recently with a 107% increase in auction activity in 2023, compared to the previous 5 years. 

“With its unique combination of affordability, investment potential, and artistic integrity, the print market is not only reshaping the landscape of art collection but also exerting a significant influence on the future trajectory of the art market as a whole.” - The Art Investment Report

2. International Art

International auctions can offer quality investment-grade art at more affordable price points. For collectors passionate about the art and culture of less mainstream nations, focusing on artists celebrated regionally but unlikely to transcend to major auction houses like New York or London can be a smart approach. As long as these artists maintain cultural stature in their home countries, regional auction houses will continue to broker transactions.

For example, Shaun Allan (known as Shal) is an Aboriginal artist rapidly building his reputation in Australia. His exhibition A Part of It All completely sold out at Laundry Gallery in Darwin, Australia, located on the traditional lands of the Larrakia people, Aboriginal owners of the Darwin region.

Image Credit: Urban List

3. Emerging Artists

Another promising area for finding investable art is among emerging artists represented by top New York City galleries. These younger artists tend to lack secondary markets initially. However, representation by influential galleries helps drive the development of a collector base over time. Gaining access can be challenging, as prestigious galleries are highly selective about their clientele. Working with an art advisor is one way novice collectors can get in early on the action with emerging talents.

Recently, I came across an emerging artist whose work I enjoyed tremendously. Alexis Bruchon is represented by Philippe Labaune Gallery, located in Manhattan's Chelsea art district.

Alexis Bruchon, Paris - New York, 2023 Image Credit: Philippe Labaune Gallery

Artistic Ascension: The Art Collector’s Journey

While buying art can be exciting, that’s not the first step in the art collector’s journey. Whether motivated by passion, personal enjoyment, or an investment angle, the progression from discovery to becoming a master collector typically follows a similar path. 

1. Discovery Phase: Collectors explore interests, art forms, and analyze appealing pieces.

2. Experimentation Phase: They purchase art, experiment with different types and styles, and begin to understand the nuances of what makes art valuable to them.

3. Refinement Phase: As tastes and market knowledge develop, collectors refine the collection around specific genres.

4. Professionalization Phase: Serious collectors consider the investment value of their collection, becoming more strategic about acquisitions and considering the financial implications of their purchases.

5. Mastery Phase: Collectors are recognized for their significant, curated collections and may even influence trends.

The focus of Artobiography is on the Discovery Phase. This is the entry point into the art journey. It is filled with enthusiasm, but can also feel daunting and overwhelming. Where do you even start to gain understanding? The key is breaking the exploration down into manageable steps. 

Learn about the Art Market

Getting to know the art market is like learning a new language. Before purchasing any art, it's important to understand the basics of how the art world works. 

Art is sold through galleries, auctions, online platforms, and directly from artists. Galleries represent artists and promote their work, while auction houses like Sotheby's and Christie's sell to the highest bidder, regularly making news with record sales.

Art Advisor, Adam Szymanski, PhD, says that many factors influence an artwork's value. People buy art for different reasons. Some value cultural impact, some want to support emerging artists, while others look for investment potential. When purchasing with investment in mind, focus on artworks that are investment grade, meaning they have an active secondary market and resell regularly at auctions and among collectors.

The best way to check for an active secondary market is by using an art database like MutualArt. Once there, you can see how often works by a chosen artist come up for auction and what prices they get. Frequent transactions and steady price levels indicate healthy resale activity.

Source: MutualArt

Explore the Art Movements

Understanding art is like time travel. Art transports you to different eras, cultures, and mindsets. It’s not just about how a piece of art looks, but why it was created, what it meant to people at the time, and how it reflects the society and politics of its era.

Source: Art in Context

Let’s look at some of the most famous art periods.

• Renaissance marks the rebirth of interest in the arts and sciences.

• Rococo is characterized by ornate elegance, light colors, and playful themes.

• Impressionism captures fleeting moments with quick brushstrokes and light effects.

• Expressionism focuses on emotional experience with bold colors and distorted forms.

• Cubism breaks subjects into geometric shapes, offering multiple perspectives.

• Surrealism explores the world of dreams and the unconscious.

• Contemporary Art reflects current ideas, challenging traditional boundaries.

Find What You Love

Image Credit: claudiodivizia / DepositPhotos

Discovering what you love in art is a personal journey of exploring your tastes and emotions. 

• Visit Different Places: Check out galleries, museums, art fairs, and exhibitions to expose yourself to different styles, from Renaissance to Contemporary.

• Notice Your Reactions: Pay attention to what draws you in and stirs something inside you. 

• Make Notes: Sit with a piece for a few minutes and jot down emotions it evokes. Is it the colors, the subject, the mood?

As you explore the art world and discover pieces that connect with you, stay curious and engaged throughout the journey. Keep learning about emerging artists, art movements, and valuation. If you pursue collecting with an open mind, it will be a rewarding path filled with great finds along the way.