Art Investing for a Financial Future

By Mika Hamilton

Article posted by Janet Schlarbaum

When we think of investing we probably conjure images in our minds of the New York Stock Exchange, suited stock brokers making deals, bonds and treasury bills, and all manner of financial matters. The last thing we probably think about is art. Art investing, however, can be a big money business, and can create incredible financial gains and losses for those who choose to speculate in the art market.

Art investments can be risky, because no one ever knows for sure if an artist’s work is ever going to be appreciated. Even living fine artists who make a living doing their work are producing paintings and other artwork that may not be worth anything more than was paid for the work until well after the artist is dead and gone. When Keith Herring started painting his colorful silhouettes, there was scarcely anyone willing to pay attention to them. Once he died of AIDS and his work became associated with the national AIDS awareness campaign, the value of his work skyrocketed.

It’s difficult to give advice regarding art investments, but there are a few guidelines that the potential art investor can look at to help determine whether a particular artist’s work is worth purchasing.

How Known is the Artist?

Artists that are already well known tend to remain well known once they’re gone and their work becomes that much more valuable. When considering an art purchase, taking the artist’s fame into account can be a good idea. Of course, artwork by someone who is already famous for something else (the lithographs of John Lennon come to mind) will always be of some value.

Controversy Sells

If an artist raises eyebrows, it is likely that her work will rise in value. The work of photographer Robert Mapplethorpe is a prime example. Whether his photos were truly offensive or not makes no difference when considering that the attention brought to him by a senate investigation cause the value of his photographs to double practically overnight.

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Getting Started Investing is Often the Hardest Part

By Mika Hamilton

There are several reasons people give for not investing their money in things like stocks, bonds, and mutual funds. One reason is that they feel that they don’t have enough money to make a serious investment, but a more common reason that many people have absolutely no idea how to go about getting started investing. In fact, if more people understood the basics of investing and had a cohesive plan for getting started investing, more people would do it.

Let’s assume that the first reason does not apply to you and you do, in fact, have some amount of money that you’d like to invest. How do you get started investing? You could contact a stock or investment broker and discuss the options that would be best for you. Whether you’ll want to do this will depend quite a bit on the amount of money that you have to invest. If it’s a small amount, you may be better off seeking some smaller, safer investment than you would be by jumping directly into the stock market. Some people get started investing by choosing simple accounts with their bank. CD’s and IRAs make good investments, for example, for medium and long term goals. IRA accounts are intended for retirement, while CDs are time deposits that must remain in place for a set amount of time (often anywhere from as little as a week to as long as ten years) while they earn interest.

If you do go to the stock market, or “graduate to it” after getting started investing in safer accounts, you should resist the urge to buy and sell stocks wildly. One mistake that many first time investors make is they become nervous about the stability of their investment and they watch their stock rise and fall every day. If it drops too much they become afraid that the bottom will fall out and they sell at a lower price than they originally paid. This is a bad idea and works against the reasons they got started investing in the first place. Instead the new investor should “let it ride’ and sell only if there is a sudden spike in the price that won’t likely repeat. Otherwise, stocks should be a long term investment, especially when someone first gets started investing.

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