Art Market Correction Preparation - artmarketblog.com First of all I am not saying that an art market correction will happen, in fact my doubts are increasing as to whether a market wide correction can occur.
News-Antique.com - Apr 09,2008 - First of all I am not saying that an art market correction will happen, in fact my doubts are increasing as to whether a market wide correction can occur, but it is still important for investors to keep in mind that an art market correction at some level is a possibility. Because an art market correction is always going to be a possibility it is important to factor a correction into your investment strategy and exercise caution in a market where caution seems to have gone on vacation. If an art market correction does eventuate it will be those investors who did not factor a correction into their strategy that will be more likely to run into problems. Consider this - If you make a profit on your investment now and a correction doesn’t eventuate you have still made a profit but if a market correction does eventuate and you have made a profit on your investment you have avoided potential disaster.
Instead of focusing on the often usually incorrect media reports on the state of the art market, collectors and investors should be concentrating on their own goals and motivations. There are definitely signs that the art market is beginning to slow down so now would be a good time to start assessing the performance of your art investment and deciding whether you should be selling or holding. Before I say anything else I think it is extremely important for all art investors and collectors to remember that history has shown that “what goes up must come down AND what goes down must come up again”. However, it is also important to keep in mind that not all prices that went down will go back up again (particularly susceptible are those artists who do not have an established secondary market) and the prices of some artists will take longer to rebound than others (most likely those artist’s that have experienced rapid and extensive growth).
If you are wondering whether you should be selling your investment then you should decide on a minimum profit percentage that you think is reasonable (taking into consideration the cost of selling an artwork) and then start getting an idea of what your investment is worth on the market. To get an idea of what your investment in art is worth you should contact auction houses to get an idea of what estimate they would put on that work if you were to put it up for sale and also look at recent auction results for the artist. Art auction result databases such as artprice.com, artnet.com, askart.com will give you extremely useful information on the past performance of an artist’s work at auction and should be utilised by all art investors.
Here are some factors that you should take into consideration when assessing your investment strategy:
1. The tendency for people to wait until the eleventh hour before making a decision regarding their investment is the reason that so many people end up getting burnt