Investing in art is gaining pace across world. A study shows that art buyers are acquiring art and collectibles as an investment option.
Indian contemporary art is giving matching response to this growth as a result of getting international recognition and visibility. No wonder, several reputed museums around the world are hosting India themed exhibitions.
Globally, art and collectibles have been included as an important component of a balanced portfolios and asset diversification strategies.
Traditional belief had been that art is a matter of pride and in prowess of only rich and famous. Substantiating facts to this belief were when Pablo Picasso's painting, 'Nude, Green Leaves and Bust' was sold for whopping sum of Rs. 475 crore, and an international auction house Christie's sold Indian artist Syed Haider Raza's painting, 'The Saurashtra', for staggering amount of Rs. 16 crore, making it the most expensive painting sold by an Indian artist!
Indian art market has matured considerably, offering good long-term returns on investment. Majority of the buyers of Indian art have been industrialists, corporates, institutions, ultra HNIs, foreign nationals and NRIs. However, the trend is changing rapidly and the art buying is becoming broad- based due to emergence of middle-class showing appetite for art.
While doing our financial planning, we generally invest in fixed deposits, mutual funds, real estate, gold etc. but, tend to miss allocating ART as an asset class in our investment portfolio. Art is a good investment as it is not volatile the way equity, commodity, realty markets are! Art is the only form of investment where prices don’t come down even in the down turn of economy! Besides commercial consideration, art is for pleasure, enlightenment; gives treat to eyes and joy till you possess it.
Although the art market is dominated by the veteran, however, of-late numbers of emerging artists have broken new ground. In past few years, an affordability base of art has broadened with the work of emerging artists. You can look at investing in emerging artists whose works are available from Rs. 60,000/- onwards.
Imagine if someone would have invested in masterpiece of M. F Husain’s early days editions, when he was still an emerging artist. That work of his might have costed Rs.1Lac or so then. However, same masterpiece would fetch upward of few crores now! So, we should do value investing in art of emerging artists, much like, identifying rising star corporations like Infosys in it’s start-up phase.
Buying work of young talented artists, before they get to galleries, is a great way to start collecting art from investment point of view and in order to get good long-term returns. Look for an artist who is represented by a good gallery, got good reviews, has registered good sales in his first few shows. It also pays to learn about the artist's life and times. That information can provide context and meaning for an investment piece. Information on prestigious awards or fellowships the artist has won, academic positions held, can give positive indications about the long-term value of a piece.
For short-term returns, go for the works of the established artists which will fetch you 100% increase in two to four years of time frame however, here one has to invest more.
Needless to say, today’s emerging artist would be tomorrow’s veteran and legend.
In India, paintings occupy major share of the art market alongside of other art variants like sculptures, murals, stone carvings and clay works.
From valuation view point- oil on canvas is the most expensive form of painting. The next is acrylic on canvas, followed by acrylic on paper. A water color on paper painting would be cheaper than these, while charcoal on paper would cost the least.
We should check few vital documents while purchasing art, such as, certificate of authenticity, authenticity guarantee, a provenance certificate, that is, the whole chain from where the artwork has moved, and a full-value invoice. Also, a note on what the painting depicts.
A giclée is a machine-made print, reproduced on a fine paper or canvas with color and clarity that can rival the original. But it's not original, it is just a copy.
The rarity and originality of a work gives value to any art, so an original will always be worth more than a reproduction. While a giclée may come labeled with superlatives like "museum quality" or "archival", and the seller may hawk a certificate of authenticity, it will never be valued as an original and won't pull in any future income for you.
You need not buy art in its physical form. You have the option of electronically investing in units of art funds. Some art houses have launched mutual funds to ease investments in the Indian art market. We can monitor the prices of these funds from any NSE terminal. We can buy the required units through demat account.
The money collected through these art funds is used to buy actual art of famous artists. Paintings and serigraphs are then held with the art house that launches these funds.