Investing in art according to the rules of art – Trend magazines on PC

The 41st edition of the Watou Art Festival is coming to an end soon. Have you got it under control and are you considering investing in a piece of art? Two experts will set you on your way.

The art market is increasingly seen as an alternative to traditional investments. According to the platform Artprice, the market grew by 60 percent worldwide last year. If you are considering investing in art, you better do your homework beforehand. Trends consulted two experts: Christine Mostert, art consultant at Puilaetco, and Eugénie Dumont, art collection manager at Degroof Petercam.

The art market is increasingly seen as an alternative to traditional investments. According to the platform Artprice, the market grew by 60 percent worldwide last year. If you are considering investing in art, you better do your homework beforehand. Trends consulted two experts: Christine Mostert, art consultant at Puilaetco, and Eugénie Dumont, art collection manager at Degroof Petercam. What criteria affect the value of a work of art? EUGENIE DUMONT. “The authenticity, the provenance, the condition of the work and the rules for the international movement of the work. These are rational criteria. But also the name and career of the artist, the subject, the format, the fragility and the rarity In addition, the cycles of influence, which are subjective and dictated by trendsetters, affect the value of a work.” CHRISTINE MUSTERT. “History and provenance also guarantee a value. Preferably invest in a work of art with a date and a signature from the artist.” What costs do you need to take into account? DUMONT. “An art collection requires significant costs, more so than for an investment portfolio. Take into account commissions from auction houses, galleries and dealers when buying and selling. In addition there are import duties and the costs of transport, storage and insurance. In the long term, additional costs may arise for conservation or restoration, and the intervention of the experts to keep an up-to-date inventory and valuation is also not free.” How transparent is the art market? MUSTARD. “Thanks to platforms such as Artnet and Artprice, which provide information on auction prices, the market is becoming more and more transparent. Moreover, today it is subject to strict due diligence rules.” DUMONT. “Recent rules to avoid money laundering and fraud provide more transparency. Remember that the data published by the auction houses is only the tip of the iceberg. A large part of the transactions take place through private channels, with numerous intermediaries.” Does the art market develop differently from the financial markets? MUSTARD. “The art market also depends on the interaction between supply and demand. Certain periods, artists and categories are more popular than others. If supply is low, prices rise.” DUMONT. “The art market is influenced by other, more subjective criteria than the financial markets. By building an art collection, you can therefore diversify your wealth. Because art acts as a hedge against inflation in times of economic growth and as a store of value in times of recession. But trend cycles can cause market values ​​to vary widely.” Is the American market more volatile than the European one? MUSTARD. “The most important works are traded in the United States and certainly in New York. Those places are the barometer of the modern and contemporary art market. But I don’t think that the American art market is so unstable that, for example, certain works are due to fads or hypes of may become worthless one day.” DUMONT. “Many great artists of the post-war and contemporary genres come from or live in America. Contemporary art is more than ever subject to fashion, partly because of its expansion into new markets, the digitization of the market and the transition to a new generation of collectors. Some rising popularity of stars also means that the market begins to show speculative tendencies.” Does investing in art require a long-term vision? DUMONT. “Buying art for the sole purpose of making money is never a good idea because of the volatility, liquidity and cost of ownership. You invest in a work of art primarily from a personal and emotional connection. But buying a coup d’état also means risks because of the criteria that determine the value.” MUSTARD. “Buying a work of art is a financial investment. From a certain amount, you take a risk that goes beyond the pleasure the work gives you. It is therefore wise to know what you are investing in and to have a long-term vision. : If a contemporary artist does not establish himself during his lifetime, there is little chance that his work will increase in value afterwards.” To what extent does liquidity risk play a role? MUSTARD. “That risk is definitely there. If you suddenly lack money, it is not a good idea to sell a work of art in a hurry.” DUMONT. “Since such a work is in principle unique, it cannot be sold as smoothly as shares on the stock exchange. By engaging an auction house, you can shorten the process, but this means additional costs. The physical characteristics make the transaction even more difficult. and expensive at due to shipping costs, insurance and taxes. Also, if your work doesn’t sell, its ‘freshness’ will also be affected and you’ll have to wait to offer it again.” How important is good guidance? MUSTARD. “It is wise to seek advice from a professional who, on the one hand, respects your taste and sensibility, but on the other hand can protect you from pitfalls such as fashion effects.” DUMONT. “The trend cycles of contemporary art are constantly accelerating, and the diversity of artists combined with the use of digital communication makes the choice difficult. The objective advice of an independent expert is therefore not a superfluous luxury to avoid unpleasant surprises in the long term. that facilitates access to certain collections.”

Leave a Comment