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Why you should invest in contemporary art

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Why you should invest in contemporary art

If you are wondering where to invest your money, look no further than the world of contemporary art. Art is more often than not a sound investment, and can lead to high returns if you choose the correct pieces. Still not convinced? Below are just some of the reasons why contemporary art should be at the top of your investment list.

 

There is capital growth potential

The acquisition of art, whether it is a piece by Damien Hirst or a new piece of African art, is no longer considered to be an alternative financial investment but a key one. Contemporary art has massive capital growth potential, as much as a compounded average return of 10.85% per annum.

If you were to sell your art after a number of years, you may find that your capital growth is in excess of 20%. This is an impressive number for an industry often considered frivolous and fickle with its trend changes. If you are looking to acquire an asset which can bring you not only aesthetic pleasure but also monetary gain, contemporary art is a sound option.

 

It has significant value

Contemporary art represents an asset that many people can afford, due to emerging artists pricing their work at lower rates. If you purchase a piece by an artist who is up-and-coming now, in a year or two, you will own an original piece of artwork by a well-known artist, which will increase the value of the piece.

Another aspect that adds value to contemporary art is that the market for it is growing and people are willing to pay impressive amounts for it. According to the Mei Moses Family of Fine Art Indexes, art rises at the same rate as stocks, so if you invest in the right artwork, you will receive an impressive ROI once you decide to sell it. But remember to sell at just the right time to make the most of your investment.

 

You can build an investment portfolio

When looking to build an investment portfolio, you will need to carefully assess your reactions to risk, and strategise your acquisitions accordingly. You may want to create a mix of blue-chip (slower growth but more liquidity), emerging (lower acquisition costs with potentially better returns, but might fall in values) and established (a halfway house between the other two) items in your portfolio, which contemporary art can help with.

The growth of the art market both financially and in popularity means that the art market could be a safe haven for your investment money. Should you find a stunning piece of contemporary art, you should invest in it as soon as possible as financial trends are known for dropping without much warning.

 

Art has historical value

Much of the contemporary art seen today speaks about the political, socio-economic and societal issues faced by today’s society. It is a preservation of the voices of the present, which will show future generations how the world was during the time of the artist. You will have a piece of visual history to hang on your walls for years to come.

This historical value will increase the financial value of the piece too, meaning that when the time comes to sell it you will receive a larger payout. Look for pieces that address difficult issues in a unique way, but always remember to buy art that you love to look at and that inspires you. This usually means that it will inspire and delight potential buyers too.

 

You are helping the artist

This may seem like a ‘feel-good’ sentiment, but it is an aspect to consider when investing in contemporary art.  Investing in a piece of contemporary art allows the artist to grow in popularity and to have better financial footing. This allows them to continue making their art and contributing to the art market.

Helping the artist may also mean that they remember you as an investor, and will contact you once they have created a new piece. Being the first to know about an up-and-coming artist will give you an edge on the competition, allowing you to beat other buyers and purchase pieces that you believe are best for you.

 

Final verdict

Investing in contemporary art should be at the top of your list of options for your next investment. The art market is always in flux, but you will find that after a certain amount of years your painting or sculpture will be worth more than the initial cost, and you will be able to cash in on your intelligent investment and work towards your next one.

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