5 Practical Tips for Investing in Modern Art

Written by Daisie Team

Published on 11 July 2023 6 min read

Have you ever looked at a piece of modern art and wondered, "Could this be a smart investment?" You're not alone. In fact, modern art investment has become increasingly popular among savvy investors around the globe. From paintings to sculptures, modern art offers an intriguing avenue for investment, blending the aesthetic appeal of art with potential financial growth. So, if you're thinking about dipping your toes into the world of modern art investment, here are five practical tips to help you navigate this fascinating market.

1. Know Your Goals

Before you start investing in modern art, it's important to understand your goals. This involves defining your budget, identifying your interests, and planning for the long-term and short-term.

Defining Your Budget

When it comes to modern art investment, you need to know how much money you're willing to invest. It's like setting a budget for any other investment—only this time, you're buying art. Are you willing to spend a few hundred dollars, or are you ready to invest thousands or even millions? By defining your budget, you can focus your search on art pieces that are within your price range, helping you avoid the disappointment of falling in love with a piece that's out of your budget.

Identifying Your Interests

Investing in modern art isn't just about making money—it's also about buying art that you love. So, spend some time identifying your interests. Do you like abstract paintings, or are you more drawn to sculptures? Do you prefer works by established artists, or are you excited by emerging talents? Remember, the beauty of art is subjective, so invest in art that speaks to you personally.

Planning: Long-Term vs Short-Term

Like other forms of investment, modern art investment requires strategic planning. Are you looking to make a quick profit, or are you willing to wait for your investment to appreciate over time? Usually, investing in modern art is a long-term game, with many artworks appreciating in value over several decades. However, there are also opportunities for short-term gains, especially if you have a keen eye for emerging artists whose work is likely to increase in value quickly. So, be clear about your investment timeline and plan accordingly.

2. Research the Market

Once you've defined your goals, the next step in your modern art investment journey is to research the market. This involves familiarizing yourself with artists and their works, studying art market trends, and learning about art auctions, especially in key art hubs like New York City, New York.

Familiarize with Artists and Their Works

You wouldn't buy a car without knowing its make, model, and performance history, right? The same goes for art. When investing in modern art, it's important to learn about the artists and their works. Who are the artists? What are their artistic styles and themes? How have their works been received by critics and the public? This information can help you understand the value of their art and predict how their works might perform as investments. For example, investing in works by artists who have been recognized with major awards or have had exhibitions in well-known galleries or museums might be a good move.

Study Art Market Trends

The art market isn't static—it's influenced by various factors from economic trends to societal shifts. So, keep your finger on the pulse of the art market. Are certain artistic styles becoming more popular? Are artworks from specific regions gaining traction? Are there new platforms for buying and selling art? Keeping up with these trends can help you spot potential investment opportunities.

Learn About Art Auctions in New York City, New York

New York City, New York, is a major hub for the art market, hosting some of the world's most prestigious art auctions. These auctions can provide valuable insights into the modern art investment scene. Who are the top-selling artists? What types of artworks are fetching high prices? How are the artworks being valued? Even if you're not ready to bid in these auctions, they can offer a wealth of information to inform your investment decisions.

3. Buy from Reputable Sources

Now that you're armed with knowledge about the market, it's time to make your first modern art investment. But, where do you buy? This step highlights the importance of purchasing from reputable sources such as art galleries, art fairs, and online art platforms. It also touches on the need to avoid counterfeit art, a pitfall that can be easily avoided when you purchase from trusted sources.

Art Galleries and Art Fairs

Art galleries and art fairs are great places to start your modern art investment journey. These venues not only host a diverse range of artworks but also provide an opportunity to interact with artists, curators, and other art enthusiasts. You can ask questions, discuss art, and even negotiate prices. Plus, buying from a reputable gallery or fair gives you peace of mind regarding the authenticity of the art.

Online Art Platforms Like Artnet

If you prefer shopping from the comfort of your home, online art platforms like Artnet are a great option. These platforms feature artworks from artists around the world and provide a wealth of information about each piece, including its provenance, condition, and price history. They also offer buyer protection guarantees, ensuring that you get what you pay for.

Avoiding Counterfeit Art

Counterfeit art is a serious issue in the art market. But don't worry—you can avoid it by sticking to reputable sources and doing your homework. Always ask for documentation proving the artwork's authenticity and check the seller's reputation and track record. If something seems too good to be true, it probably is. Remember, investing in modern art isn't just about buying art—it's about securing your investment too.

4. Protect Your Investment

Once you've made your modern art investment, the next step is to protect it. The value of art is not just in its beauty, but also in its condition. Ensuring your art is properly insured, stored, and maintained can make a significant difference in its long-term value. Let's take a closer look at how you can protect your investment.

Insuring Your Art

Art insurance is a must for any serious art collector. It protects your investment against damage, theft, and other unforeseen circumstances. When choosing an insurance policy, make sure it covers the full value of the artwork. You might also want to consider a policy that covers the cost of restoring the artwork in case of damage. It's not the most exciting part of investing in modern art, but it's definitely one of the most important.

Proper Art Storage

Storing your art properly is crucial for maintaining its quality and value. Your artwork should be kept in a space with controlled temperature and humidity, away from direct sunlight and high traffic areas. This prevents damage from environmental factors such as sunlight, heat, and moisture. Remember, a little care goes a long way in preserving the life of your art.

Regular Art Maintenance

Maintenance is just as important as proper storage. Regular cleaning and inspection can prevent minor issues from turning into major problems. But be careful—improper cleaning can do more harm than good. It's best to consult with a professional conservator for advice on maintaining your specific piece of art. After all, you've invested not just your money, but also your time and passion into acquiring this artwork—let's make sure it stays in tip-top condition for years to come.

5. Consider Resale Value

Modern art investment doesn't stop at the purchase. Considering the resale value of your artwork is an integral part of the investment process. This involves understanding the artwork's potential value, the dynamics of the resale market, and the strategy for future sale. Let's dive into these points to shed some light on this aspect of modern art investment.

Assessing Art Value

Understanding the potential value of your artwork is critical. You should consider factors such as the artist's reputation, the artwork's provenance, and its condition. Additionally, the demand for similar artworks in the market can also impact its value. For instance, if the artist's works are gaining recognition, the value of your artwork may increase. Therefore, keep an eye on market trends and stay informed about the artist's career.

Understanding the Resale Market

The art resale market can be quite volatile. Prices can fluctuate based on trends, economic conditions, and changing tastes. To navigate this market effectively, you need to understand its dynamics. This includes knowing when to sell—timing can significantly influence the price your artwork will fetch. You also need to choose the right platform for the sale. Auction houses, art fairs, and online platforms all have their pros and cons, so do your homework to make the best decision.

Planning for Future Sale

Finally, formulating a strategy for future sale is crucial. This could involve holding onto the artwork for a specific period to allow its value to appreciate, or selling when the market is favorable. The strategy will depend largely on your investment goals and market conditions. Remember, modern art investment is not just about buying and selling; it's about making smart decisions that maximize the return on your investment.

If you're looking to dive deeper into the world of art investment, don't miss the workshop 'How to Invest in Art' by Ciarra K. Walters. This workshop will provide you with valuable insights and practical advice on navigating the modern art market and making smart investments in art. Start your art investment journey today!