Investing in Art

by Charlotte Wood
(last updated February 21, 2009)

Investing is a whole other world of finance that's sometimes difficult for the layman to understand. You have to know all about the artists you're interested in, what makes their work unique, what makes it have value and you have to know the trends in the value and trader's opinion. It's all quite overwhelming, but fortunately there are a few basics that if understood can get you started in your art investment adventure.

The basics are simple: You buy a piece of artwork and hope that the value of the work or of the work of your artist in general increases. This increase in value can happen almost immediately or it can take years—that's the uncertainty of investment. Investing in anything, regardless of what the actual hobby or item is, deals greatly with business sense and not so much with actual taste.

If you're a serious investor, you'll probably be more concerned with the business end of it. Like with anything else in economics, art follows the same principles of supply and demand which directly affect its value and therefore your investing sense. If you want to be a hard-core investor, familiarize yourself with the market and know the trends. Investing is more business than anything else and so you'll most definitely need some good economics sense to succeed.

If you're more of a casual investor however you can be more relaxed about the whole business. You can buy what you want and not have to worry so much about the actual worth. Be wary of taxes though because if it's a real "investment" according to the law, you'll basically need to keep in under lock and key to protect its worth.

Another thing to keep in mind as you begin your investing endeavor is to watch out for scams. Become familiar with the scams used and know what makes a work original and what is important when authenticating a work. Know how legitimate auctions function and how the market functions as a whole. The better you know the trade and the market, the better investor you'll become. This takes some research, some observation, and like all things dealing with investing, it will necessitate the willingness to take risks. If you can get a good grasp on what the market is and what it entails and put in some of your own personal flair and risk then at the very least you'll have some art to hang on the walls and some good stories to tell!

Author Bio

Charlotte Wood

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