Investing in the art business can be a tempting space because of the potential it carries. Add glittery, star-studded events to that and it is an offer that you simply can’t resist. However, while all that could easily get to you, do not make the mistake of investing your finances without some consideration. Investing in art comes along with its own risks and expenses, while on the other hand the Millionaire Blueprint will minimize risks and maximize profit if you decide to go into the online trading. You need to be absolutely sure if you are placed well even if the consequences are not in your favor.
However, we do not mean to scare you away. Investing in art can be quite lucrative. The trick is to know where to put your finances and when. Listed below are four tried and tested tips for investing in the art industry.
Understanding your portfolio
You need to understand your portfolio before adding art investments to it. It may or may not fit in with your other investments. Never consider art as yet another commodity. It is an unregulated asset and comes with a number of investment risks. What works for buyers of art might not work for sellers of art. If you are associated with an art business, always weigh in the pros and cons before touching the finances.
Origin is important
Considering the fact that the art industry is rampant with fraudsters, the origin of the piece of art you are buying or selling is of prime importance. Do your due diligence of carrying out a thorough background check of a work of art. You also require a certain viewpoint that differentiates you from the crowd. We always recommend looking beyond what everyone else is running after.
All beginners should know that when a deal looks too neat, complete with paperwork and data of all kind; it could very well be a scam. Being suspicious is the least you could do to save yourself from frauds and scams.
When it comes to investing in art, the need for research should be emphasized upon time and again. Since there are a lot of variables involved in buying art, you should keep the essential factors in mind and buy accordingly. For example, do a background study of the adviser and ensure that the pricing quoted is transparent.
Educate yourself by following art publications and attend art events. Have a fair idea of different periods and genres. Communicate with different artists and make time to visit galleries. Talk to everyone so that you have a clear idea of what is actually selling.
As fascinating as the business of art sounds, there are costs of owing a work of beauty. Not all investments will incur these costs. Gallery fees, storage costs, maintenance, auction and insurance take up a good deal of your finances. Find out if you are ready for such investments. The physical value of a work of art is what makes it sell. To maintain that value, you need to spend money. Moreover, art is categorized under collectibles and they will also be taxed higher.
There are several other factors that you have to consider before investing in the art industry. We have attempted to discuss the top 4 here.