constant flow of new work to feed the market and fuel people’s interest. In the past the art market has been more focused on works by old masters and other “historical” artists which has caused the market to rely on the re-circulation of a limited supply of works.
Although the art market is stronger than ever it is important not to become complacent and ignore the primary rules of art investment which are:
1. Art is a long term investment which means that you should be looking at holding your investment for a period of 7-10 years but you also should be prepared to sell at any time if the market presents a favourable opportunity.
2. Art is a good form of diversification and should form part of a balanced investment portfolio.
3. Diversification of your art portfolio is important to spread the risk
4. Research artist, artwork and dealer thoroughly and get several opinions
In conclusion, there is considerable evidence to suggest the art market will continue to increase in strength and popularity but as long as the media continues to present an analysis of the art market based on a narrow sector (high-end) of the market there will continue to be conflicting reports about the status and long term viability of art as an investment. I would therefore suggest that you approach art investment as you would any other investment by analysing the suitability of art as part of your investment strategy and considering art as a form of diversification that can provide balance and stability to your portfolio with the added bonus of being a pleasure to own.
Nicholas Forrest is an art market analyst, art critic and journalist based in Sydney, Australia. He is the founder of artmarketblog.com, writes the art column for the magazine Antiques and Collectibles for Pleasure and Profit and contributes to many other publications.