Doctor's Review: Medicine on the Move

October 21, 2017
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Art and the Zen of investing

A painting can be a worthwhile place to store your money, as long as you buy what you love

If you've got even a little disposable income, investing in art can seem like a good idea. In many ways, it is. After all, art looks good, it spruces up a room and can, in fact, lend added value to your home if you're trying to sell it. Most potential home buyers, whether they admit it or not, are affected by your removable goods; art, sculpture, even beautiful rugs and furniture can help you get that extra edge in competitive markets.

But, there are caveats — big ones. Art as a personal investment is a dangerous game unless you've got enough money to deal with established artists, galleries and top auction houses.

According to Merrill Lynch, as quoted in the Globe and Mail, "art, gold and commodities offered the least attractive risk-reward potential, providing inferior returns while generating substantially more risk." The company adds that art investors can face up to a 17-percent chance of loss in value over five years.

One of the problems with art as investment is that there's no guarantee that artwork won't actually decrease in value as time goes by. In fact, it's likely that it will, especially if you've paid a lot for it.

The artist's death, which has often meant sudden explosions in value for their work, doesn't necessarily deliver. Abstract Expressionist Mark Rothko's monumental paintings, for example, have mostly faded and crumbled, a result of the unstable materials he used. While alive, Andy Warhol flooded the market with his revolutionary Pop art and then cynically began to copy himself. His heirs continued to release piece after piece after his death and again, we've seen significant devaluation in the last two decades.

Pablo Picasso, who admittedly can still command astronomical prices for his ground-breaking works, released so much second-rate stuff towards the end of his long life that you can now buy a sketch of his for around US$800. Other giants like Renoir have been the victims of greedy relatives and/ or galleries who've made available hundreds of "original prints" — often unsigned — which have significantly hurt prices for non-museum-grade work.

This all sounds quite depressing, but, the news isn't all bad. Art can still be a worthwhile place to store your money — as long as you do it for the right reasons. (There's always the possibility of investing in art for your business or clinic but that's a whole other world — see sidebar.)

For your private collection, though, you need to remember the cardinal rule for investing in art in the first place: because it's beautiful, it looks good, it makes your home look good and it makes you happy. If you do it right, at the very least, you won't lose any money. Here are 10 basic tips you can't afford to ignore.

Always buy art you like. If it's for your own collection, remember that you'll be seeing it every day. It's okay to ask the advice of gallery owners, but they're obviously biased. If you hate the bloody thing, odds are good other people will as well.

2 Know your artist. Once you've established that you like something, find out a bit more about the artist. Do they have a track history? Where have they shown before? Are any of their works in museums? Do they have any catalogues of their work? Are they overly prolific? This last point is a real danger — many excellent artists have damaged their own worth by producing too much. While it's true that everyone's got to eat, artists who flood, say, the corporate market with works for offices, banks and so on, often do themselves — and their collectors — irreparable damage.

 

 

3 Start small. It doesn't have to cost a fortune. A small piece by a relatively established artist often has more value than a large one by an unknown. I've got a few gems that I purchased for between $250 to $800 some years back. They are worth more today. And I've got one huge work on paper (which I still love, incidentally) that cost a couple of thousand and is now worth considerably less because the artist, alas, went nowhere.

4 Find out more about art markets. Just a little casual reading in the arts section of your neighbourhood newsstand can help you get up to speed and stay up to date. While it's virtually impossible to predict the vagaries of contemporary art markets, there are a few basic rules of thumb, although note that there are always exceptions.

5 Get abstract. Abstract works are generally held in higher regard than realistic ones. This doesn't apply, of course, to the classics, but unless you can afford the Group of Seven, that nice picture of trees and a mountain at sunrise may not stand the test of time. Very few artists can pull off hyper-realism and make it pay. Our very own Ken Danby is one. Overall, though, if that's what you like, you're better off with a photo collection.

6 Small sculptures are always good. Everyone likes a small bronze sculpture — and it's always at least worth the cost of the bronze.

7 Major urban galleries are still the best. Art galleries tend to have their fingers on the pulse of what's hot — but it's often regional. The more sophisticated galleries which tend to reflect international trends are still located in major centres like Toronto and Montreal, although this is changing. Watch out for Calgary and Edmonton as Alberta continues to boom, and Vancouver's getting there too.

8 Collect one or two artists — and start when they're young. This tactic can work beautifully. Find a young Canadian artist whose work you like and start buying early — and inexpensively. Make sure they're connected with a gallery, even if it's artist-run, and follow their career closely.

Are they producing shows every one or two years? Are they growing as artists? Are they getting reviewed and noticed? Art they getting attention from galleries and publications? If not, drop them; otherwise, you could be in luck. Before you know it, you could have a major collection of art you love that's increasing in value every year. Added bonus: you become a patron. The artist and their galleries will love you and bingo — you're a connoisseur.

9 Consider alternatives. Oil paintings, particularly larger pieces, are almost always more expensive and they require care and upkeep. Sculpture is also expensive and often unwieldy; it's also hard to know if a sculpture will last or increase in value or become dated and even, God forbid, tacky with time. Works on paper (etchings, original prints, etc.) offer a cost-effective alternative and are increasingly popular, both with casual buffs and experts. They also tend to be available in a wide variety of sizes, perfect for any wall.

10 Collect a genre. You can also stick with a theme: Inuit art, poster art from the '20s and '30s, Art Deco, Art Nouveau - there's something for every taste. But, in these cases, it's especially important to deal with a reputable dealer.

The art market is finicky, unpredictable and, quite simply, weird. In the end, a work of art is worth whatever someone's willing to pay for it.

This was made clear by the record-breaking purchase of a 1907 portrait by Gustav Klimt which was recently bought by American cosmetics magnate Ronald S. Lauder for $135 million, the highest amount ever paid for a painting. Klimt is essentially a minor Art Nouveau painter with an unusual, if highly recognizable, style, but no one in the art world could've predicted that he'd beat both Van Gogh's and Picasso's previous records. Unless you're a tycoon, though, patience, good taste and a little education will serve you well in the long run.

 

This article was accurate when it was published. Please confirm rates and details directly with the companies in question.

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