Is Art A Viable Alternative Investment? by Chandra Cardinale

Chandra Cardinale

I recently met with my Wall Street neighbor Bettina Werner, a well established Italian-American artist.  Bettina’s unique medium is salt, which she began exhibiting in the 1980’s, building a dedicated following throughout the years.

Like Werner’s artwork, a true artist’s work can come in all shapes and sizes.  Art is most certainly an asset in the broadest sense of the word, and considered by some as their most valuable possessions.  Its aesthetic, cultural or historical value can be limitless, and unlike any other asset, it’s beauty and reward can be timeless.

“In Perfect Purple State” (artwork created with textured colorized salt technique invented by Bettina Werner in the early 1980’s) This piece was inspired by the Sonnet XXXVIII by Elizabeth Barret Browning “First Time He Kissed Me (The Gold Blessing)”

Some investors believe Art to be a financially lucrative asset that can exceed the performance of other alternative investments.  Of course, there is no certainty that this is the case since each piece of art is unique and with it has its own market.  As with any asset, investing in art requires careful consideration and expert advice. Investing in art will not necessarily provide immediate returns, and as with other investments, it is certainly not risk-free or right for every investor.  Most importantly, investors must consider that one of the most difficult parts of investing in art is that it is an illiquid investment.  Although prices fluctuate like any other asset, finding the right buyer is sometimes more important than being in the right market.

Before buying a piece of art, one must consider whether it is an investment they are after, or timeless beauty.  Although art can and should serve both purposes, the rationale behind the investment is a critical component in determining the risk and time horizon.

Some art investors prefer the very well known works, ergo the blue-chips of the art world.  An investor that can find the best works at discounted prices—usually an outcome of unpleasant events—can certainly do well over time.  As in the stock market, people feel a well known brand provides safety.  Since this is not always the case, many art investors prefer a diverse mix of artists.  One way many investors have made very successful art investments, has been by buying works of established yet undervalued artists.

Bettina Werner is just one example of the many artists that are very well established in different parts of the world, but not known as well as some of the “blue chip artists” both art collectors and admirers always think of when the topic is mentioned at parties.  With such a unique medium, Bettina has earned the name of “The Salt Queen” in the art world.  Since not everyone can afford to buy a Monet, Van Gogh, or even a Tracey Emin, it is worth checking out young or successful mid-career artists like Bettina Werner, for both investment and collection purposes.  Regardless of which artist’s work you prefer, or whether your art will be an investment or not, savvy investors always know that a lot of knowledge or expert help is a necessity for success.

“Salt More Precious Than Gold” by Bettina Werner

Online art galleries such as Saatchi Online are nice places to start your at-home research.  Utilizing an expert can help you avoid buying a fake or a stolen work of art.  If you plan to go it alone, it might be worth checking out The Art Loss register, which is a database on stolen art.  Please do yourself the service and do your homework.

To sum it up, art is indeed a viable alternative investment for those who carefully navigate the market.  One of the unique and fun things about investing in art is that you can enjoy your investment’s beauty, while you wait. As long as your art is properly maintained and insured, you are able to retain it until you are either in the market for a change or the piece has increased in value as hoped.  Most art investors enjoy their collection so much that research shows that they do not anticipate selling until the value increases by over 60 percent.  If the value does not increase or even decreases it is still a piece that they can appreciate and enjoy owning forever. This is why I always say that regardless of whether you’re an investor or collector, make sure you love it.

FOR INQUIRIES PLEASE CONTACT: Chandra@reuvencapital.com

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