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Future Appreciation of Art and Crafts

Will Your Art Be Worth More?

Possible Future Appreciation of Fine Art

As just about every investment vehicle has seemed to crash over the last several years, some have turned to fine art as a way to at lest stay even.

While it appears that values are steadily rising it is hard to say if art as an investment is all it's made out to be.

Nonetheless, many investors smarter than I feel that fine art is a solid and worthwhile investment, particularly in these unsettled times. But see the story of the unsold Degas in this article about Reselling Art.

Speculation in any market is uncertain at best.

In the art world, where values are extremely subjective and prone to change based on whims, it can be extremely tricky for those who do not have a very solid grounding in the art business.

Nonetheless, it is fairly reasonable to assume that over time, the value of most collectible art pieces will slowly rise.

Educate Yourself

Take the time to learn about the market.

Art Market Research and other organizations rate art values over time.

Studying the art markets can help you learn to spot trends and track progression over long periods of time. However, these indices only tell part of the story.

Warren Buffet spoke of the concept of a circle of competence.

Your circle of competence includes the areas with which you are extremely familiar.

Investing within your circle of competence can help to insure that your investment choices are sound. If fine art and crafts are not within your circle, it does not mean that you cannot invest in art pieces.

However, it does mean that in order to invest competently, you will need to either increase your circle or find an expert whose opinion you trust.

In order to successfully invest in art, it is important to learn about art itself.

Get to know the materials and techniques that are used. Learn the names of major artists in the medium that you wish to buy.

Learn how to spot quality workmanship. You do not need to be an artist, but you do need to be a student of art.

Taking classes can help to increase your competence more rapidly, but you can also learn on your own through your own persistent research.

Prepare for Slow Growth

To invest smartly in fine art or craft items, never spend more than you can afford to lose. Look for pieces that appeal to you on a personal level, and fit with the decor in your home.

Although there are exceptions, art cannot be resold for a profit quickly. (Read about the Costs of Reselling Art.)

You should love the piece and be willing to live with it for a long time.

Do not be afraid to invest in the work of an unknown artist. It is always possible that the artist will grow in popularity and the piece will increase in value.

Even if the artist never becomes known, a quality piece may be able to draw a reasonable resale price.

Be careful and learn. Only invest in items that you love, and then you will not need to worry that you may not reap a significant reward.

The Bottom Line

Investing in fine art or crafts can prove to be a wise investment.

However, it can be difficult to determine which pieces will rise in value.

Educating yourself about the market and learning to judge quality can help you to make smarter choices. However, the art market is subjective and not all pieces will increase in value.

Never spend more than you can afford to lose and choose pieces with which you are happy. In this way, you can minimize the associated risk.

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