How to Invest in Art for Beginners: Why Art is a Good Investment in 2024?

The dynamic Indian art market is a constantly evolving landscape that has witnessed many changing trends in the field of art investment over the years. As we move into 2024, more people realise the benefits of investing in art. While it is a fact that art is not a liquid asset, it can be a valuable investment for those who understand it properly.

The fact that a pandemic increased the purchase rate of art may sound illogical, yet that is precisely what happened during the lockdown. People had more time to engage with their living spaces, and collectors could focus on what to include in their stock. Other than seasoned collectors, new buyers with tech money also came to the art market at this period. Along with this, there is a considerable increase in the range of women buying art.

Learning about artworks and making data-based decisions are some things that you should focus on while investing in art. Let’s discuss why art is a smart investment and offer some insights for beginners on how to get started.

Why is Art a Valuable Investment?

A Long-term Steady Investment

One of the significant reasons why art is a good investment is because it holds value over time. Art does not fluctuate in value based on market variations. This was very evident during the 2020 pandemic when most of the markets fluctuated considerably while the art market thrived and continued to be unwavering. The variations were not visible as the value of art tends to increase gradually over the course of time.

While art is considered a reliable long-term investment, it is essential to understand that it is a non-liquid asset; it can’t be exchanged quickly for cash. In order to liquidate your assets, you have to contact an auction house, art consultant, or art gallery and find a suitable buyer. Therefore, it is necessary to maintain art collections to set up a diversified portfolio.

• You have a Passion for Art

The primary reason to invest in art is because you have a strong interest in it. Investing in something you are more passionate about motivates you to do more research and learning. Suppose you are fascinated by a particular artist or historical period. In that case, engaging with auction houses or art advisors to discover rare art pieces for your collection is possible.

Additionally, possessing an art collection offers a unique prestige which is not found in other asset classes. It can make a remarkable conversation starter at social gatherings, dinner parties, and events.

• Diversification of Assets

Diversification of assets is significant if you are planning to make investments. This refers to the inclusion of numerous assets to diversify your holdings. Blending different asset plans, including art, helps reduce risk and adds an element of interest to your investment strategy.

Things to Remember Before Investing in Art

Reflect on the following thoughts before expanding your investment portfolio with art.

• Artist Reputation

The reputation of the artist is closely connected to the value of an artwork. Investing in established artists can guarantee you potential returns over time. Investing in emerging artists ensures that the value of the artworks will reach a considerable appreciation in the future.

• Market Trends

Conducting thorough research on the current trends in the Indian art market is always helpful for a collector. It can help you understand what kinds of art are in demand and make ideal investment decisions.

• Small Portfolio Share

Art should only represent a minor share of your total investment portfolio. Art is like an extra, more than a principal asset. Only relying on art for a considerable return is not a good idea from an investment perspective, even though you might notice some profits.

• Realism in Returns

Always consider art investment as supplementary, similar to real estate. Don’t rely on art for a stable income. Also, it is to be noted that art is considered a collectible; therefore, be mindful of taxes.

• Art is a Non –Liquid Asset

Unlike stocks or savings, fine art is a non-liquid asset. While stocks can quickly create income, selling art takes some time.

Understanding Art as an Investment

The Indian art market is diverse and includes a variety of mediums, styles, and artists. Some popular forms of art are Indian miniature painting, modern and contemporary art, and sculptures.

• Figuring out Your Style

Discovering and educating yourself about artists and their works is vital while starting your investment journey. Always find time to visit art galleries and artist studios and attend new show openings and local exhibitions. Pay a visit to museums and galleries in your own town and when travelling. Art Alive Gallery will certainly enjoy connecting with you, answering your queries, and sharing insight into the works of numerous master and contemporary artists.

• Establish a Budget

It's always a good idea to set a reasonable art budget for oneself and try to stick to it. However, you may have to extend your budget for once if you come upon a work of art that you simply must possess. Seeking expert opinion from your friends in the art world might help you understand why a work of art is priced the way it is, and you can ensure that you're investing in the right work.

• Investing in Indian Art

Understanding the market trends is necessary when it comes to investing in art. Recent auctions and sales have proved that surging interest in the sculptural works of modern masters has gained considerable prominence. This emerging trend in the art market could help you own quite a number of artworks by modern masters such as Sakti Burman, Krishen Khanna, etc. The escalating interest in the sculptural works by masters can be attributed to several reasons, including availability, price points, and their appeal to new and young collectors.

The acknowledgement of museums acquiring numerous sculptural works by masters has boosted the intrinsic value of artworks in the sculptural medium. This aids in expanding its demand among collectors belonging to multiple age groups, making it a feasible option for art as an investment. The sculptural works being unique or limited editions contribute to its rarity and there by grows in demand. Also, the expertise and meticulous attention of master artists in translating their significant motifs into sculpture is growing. Krishen Khanna’s dynamic band wallahs and Sakti Burman’s mythological works, including the Samudra Manthan, Shiva with Ganesha, Durga, and his brass sculptures, are trending now.

The sculptures are indeed beneficial options for beginners as market trends have revealed the appreciating value of these artworks. For instance, if a young or emerging collector is harboring an interest in owning some work by a master artist and is restricted by monetary concerns, they can choose a sculptural work which displays the versatility of the artist, offering a fascinating option for investing in art for beginners.

Investing in art has been demonstrated to be a profitable way to build generational wealth with annualized returns, especially in contemporary art. Art acts as a hedge against inflation because its prices have a tendency to often fluctuate inversely and rise during times of inflation. Recent studies have proved that contemporary art performed better than traditional asset classes.

Extra Tips for You While Investing in Art!

Start creating a gallery wall!

It is true that large works of art can cost you more; collecting smaller pieces is an excellent method to build a unique and vibrant gallery wall. You can stick to a consistent colour palette to develop a powerful aesthetic. Also, play with various mediums like works on paper, photography, abstract paintings and prints to attain something that grows with you in time.

Patience is Essential

Discovering art that you are passionate about can take time, whether in person or online. Don’t be in a rush to load up every empty wall right away. Begin with one or two significant pieces and build from there. Remember to enjoy the process of finding your favourite pieces and allow your collection to grow naturally.

Study the Trajectory of Artists

It is necessary to study the trajectory of the artists once you decide to buy a piece. The artist’s life, influences, journey, and various artistic phases are to be understood wisely. Notice the movement, whether it’s increasing, as well as the average price of the artist.

Take a Note of the Medium

Studying the medium and material used in a work is essential. An artist may be well known, but only a particular medium or style of work could be flourishing. It will help you not end up with work without monetary value; Creating a mixed portfolio with modern indian art, contemporary indian art, traditional indian art, and the works of masters is always the best for potential returns.

Artworks by Indian modernists and contemporary masters such as M.F Hussain, F.N Souza, Ram Kumar, S.H Raza, Manu Parekh, Paresh Maity and pre-modernists like Amrita Sher-Gil, Jamini Roy, and Raja Ravi Varma remains in demand.

Keep all these in mind; if you have any doubts, we are here to assist you in your investment journey!