Art Investment Opportunities
Investing in antiques is a straightforward business. Trust in your
own good taste, decide what you are willing to pay and make your
bid. John Shaw explains
It was sold within minutes. The glossy portrait of a man sitting
sideways in a chair, bought for £1.76 million in 1987,
was knocked down for £7.7 million,
setting a new world auction record for the work of Egon Schiele
(1890-1918), the Austrian expressionist.
In the discrete way of the auction world at this rarefied level,
bidding at Sotheby’s moved swiftly on and the identity of
both vendor and new owner remained anonymous. The episode was an
example of how profitable art investment can be when quality and
skilled marketing come together.
Art Investment Opportunities & Return Approaching
A return approaching £6 million over 13 years is good
going by any standard. A long period of ownership will have conferred
all kinds of intangible associations on the vendor, like good taste,
sophistication and artistic acumen. After all, Schiele was only 28
when he died and so such decorative portraits are rare. On top of
that comes a big cheque when it’s time to sell on a rising market.
But art investment is not simply a case of buying low and selling
high. The international auction world is really a score of quite
different markets, such as furniture, silver, porcelain and glass
moving at different levels all the time, not to mention the huge
growth in collectibles, which range from film posters to football
programmes.
Nevertheless, the impressionist and modern sales at Sotheby’s
and Christie’s are one of the high points of the auction year
and a key pointer to its overall health, which, thanks to buoyant
economies, is good.
Art Investment Opportunities Regarding Buying At Auctions
“Investment plays a role in buying at auction because nobody’s
going to part with big sums of money without having some eye on the
future,” says Philip Hook, Sotheby’s senior specialist
on impressionist art.
“But the strange thing is that people
who buy with knowledge and discernment and who love the paintings
are generally the people who end up with the best investment in the
end. Those who buy simply for investment without that love of the
pictures end up not getting what they hoped for.” He
was underlining an old truth; go for what you are interested in.
A lot of wealthy people who bought purely for investment purposes
in the 1980s saw millions wiped off their assets when the market
crashed in 1989-1990.
Art Investment Opportunities & Buying
The lesson: knowledge, as they say, is power. If you are interested
in something already, then that involvement can lead to wise buying
in whatever segment of the market you enter. Mistakes can be costly.
If you are about to enter the market, remember to take the long
view. The owner of the Schiele bought on a rising market in the
1980s, but had to grit his teeth and weather the recession before
the market rose again.
The work of Austrian and German artists is now in great demand and
both salerooms think this section of the market still has a lot
of growth in it. But the thing here, as with all other aspects of
the art market, is quality. Premium goods, fresh to the market,
will always bring high prices.
Art Investment Opportunities And The Chase
When buying, fix an upper limit and stick to it. It is easy
to let the moment go to your head and continue the chase, because
when the hammer falls that is by no means the end of the matter if
you have been successful.
You will have to pay the buyer’s premium, something charged
by all the main auction houses. With the exception of wine, coins
and books, the charge at Sotheby’s, for instance, is 20 per
cent on the first £10,000 of the hammer price, 15 per cent
on the next £50,000 and 10 per cent over £60,000.
When selling, fix a reasonable pre-sale estimate - these are a
guide for prospective buyers, nothing more. The high and low figures
are usually fixed in consultation with the saleroom staff, who know
the price similar properties have made in the past.
The lesson here is - don’t be greedy. You want to get the
goods away and any bid between the high and low offers buys a chance
of success. The saleroom is littered with stories of people who
have insisted on unrealistic estimates and been left with their
goods. They can then be very hard to sell.
Art Investment Opportunities & Working Abroad
People entering the market for the first time, often expatriates
working abroad, should always seek expert advice from a specialist
dealer or reputable art agent like Robert Holden in London.
The firm can offer a wide range of advice tailored to individual
circumstances that can make art investment, if not quite a £6
million surprise, then at least a much less bumpy ride than it could
be.
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