11 August, 2023
Art has historically been associated with prestige, wealth and status. Although it has the power to fascinate a wide variety of people, it is often seen as something to enjoy, by visiting fairs, museums and exhibitions, but not to own, leading to the general belief that art ownership is only for the few.
Instead, based on our 'share your passion' motto, we strongly believe that access to art should be as democratic as possible and that everyone should be able, if willing, to start their own art collection, even without a huge budget.
In this article, we will deepen some fundamental aspects of art collecting, highlighting the reasons why starting your own collection is worth it and outlining how you can start one even on a low budget.
Art pays off
Art is a passion asset: the emotions and attraction felt toward specific pieces of art play a primary role in determining art purchases. However, purchases are not always driven exclusively by the love for art, as, from an investment perspective, art can also be seen as a smart way to diversify the investment portfolio. In fact, art is defined as a 'safe-haven asset' for its capacity to retain value in the long term. Also, it has consistently demonstrated that it performs very well in the context of economic and financial turmoil, such as the 2001 financial crisis or the 2008 economic downturn, or in times of unexpected crises, such as the Covid-19 pandemic and the inflation peak we have experienced over the last few months. However, being an investment category, it is important to highlight that the return on investment is not guaranteed, nor is it guaranteed that all pieces of art are able to retain their purchasing value in the long term.
The artists whose works have the highest value on the market and are more likely to hold it over time are defined as 'Blue-Chip'. In this category, we find acclaimed artists, such as Pablo Picasso, Andy Warhol and Alighiero Boetti, whose works are mainly sold at auction at a very high price. Compared to other categories of artists, the Blue-Chip ones are seen as low-risk, as it is quite unlikely that they will lose their value. In fact, as recent auction results have shown, many of these artworks have outperformed their estimates in times of crisis. For example, in May 2022, Andy Warhol’s 1964 silk-screen 'Shot Sage Blue Marilyn' was sold for about $195 million at Christie’s in New York, making it the highest price achieved for any American work of art at auction, while Alighiero Boetti established his new record in November 2022 during Christie’s New York auction (£6,221,846).
Obviously, collecting Blue-Chip artists is not for everyone, as it requires a considerable budget. Thus, it is important to highlight that it is possible to adopt an investment perspective even when collecting emerging artists. In this case, the return can be high, but equally high is the level of risk involved. Recent auction results demonstrated the extraordinary growth in prices of some emerging artists. An example is Anna Weyant, who sold her first painting for $400 in 2019 and whose work now fetches more than $1 million at auction, with prices expected to rise even further. Her record work, 'Falling Womam', sold for $15,000 in 2021, achieved the record price of $1.6 million at auction a year later. Also, in this case, it is important to underline that these are exceptions in the art market, representing situations that can damage the long-term growth of the artist. However, it is possible to find talented emerging artists on the market, who are likely to grow in a more reasonable way in the medium term, providing collectors with the opportunity to have both an aesthetic and economic return for having believed in them.