We are independent & ad-supported. We may earn a commission for purchases made through our links.
Advertiser Disclosure
Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.
How We Make Money
We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently of our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.
Finance

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

What are the Benefits of Investing in Art?

By Dale Marshall
Updated: May 16, 2024
Views: 14,117
Share

The main benefits of investing in art are a sense of personal satisfaction and the financial benefit of an artwork’s appreciation in value over time. Investing in art also lets collectors see and enjoy their investments daily in a way that isn’t available to those whose investments are in stocks and bonds. As a financial investment, good art often appreciates independent of traditional economic measures like inflation or securities market indexes.

Even though art investments often appreciate slowly in value, they don’t often lose value like their traditional counterparts in the equities markets. Also unlike more traditional investments, there’s no art investment equivalent to a company’s going out of business. An artist’s output may be steady or sporadic, but immediately becomes finite upon death or retirement, often leading to dramatic increases in value. Another significant difference between investing in art and traditional investing is the duration of the investment. A stock or bond held for more than a year is considered a long-term investment; artwork is more commonly held for decades before being sold. Like traditional investing, the art world has its share of hucksters and scam artists; investors in both fields should thoroughly research their purchases, enlisting professional help if necessary, to ensure their legitimacy.

When investing in art is done strictly for financial benefits, though, it has its drawbacks. For example, art that’s already been recognized as being of investment quality can be very expensive, and should be purchased only after the investor’s financial security has been more or less guaranteed with other more traditional investments. While it’s very possible to buy art inexpensively from new artists and hope its value appreciates over time, if the artist never gains favor with critics or the art-buying public, the works’ appreciation may not match that of stocks and bonds or even keep up with inflation. Another drawback is that artwork is illiquid and can’t be sold as easily as traditional investments like stocks and bonds. The sale of investment-grade artwork often requires the services of a dealer or an auction house to realize full value, thus diminishing investor’s actual return.

Art investment can provide an investor with other very satisfying benefits. For example, individual works can be loaned to museums, enhancing the investor’s reputation and prestige. Astute investors, in fact, often exploit every opportunity to show their art in as many ways as possible, thus continually promoting the artists and potentially enhancing the value of their collection. Investors who specialize in particular artists may find themselves routinely invited to exhibits of their work. Galleries do this to promote sales, while the investors enjoy the opportunity to meet the artist and mingle with fellow aficionados.

Like any other type of investing, investing in art requires some expertise if it’s to be successful. It’s easy enough to buy a sculpture, oil painting or photograph that one likes, but that’s not the same as buying works primarily for their potential for increasing in value over time. Many art investors routinely consult with art investment professionals before making any art investment purchases.

Share
SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.

Related Articles

Discussion Comments
By Mor — On Feb 07, 2014

@pleonasm - The problem is that we only ever hear about art investments that increase in value by a lot. In terms of smart investment strategies, I wouldn't rank it particularly high.

The art world is fickle. Artists can flood the market and end up devaluing their work, or the world might be going through a particular trend or bubble that ends before you want it to.

I would never look on art as a real investment. I'd only ever buy a piece because I loved it and wanted to keep it and not because I thought it would go up in price.

By pleonasm — On Feb 06, 2014

@Iluviaporos - Well, I mean, if you are buying relatively expensive art, you are basically investing money, not just spending it. As long as you know enough about art to make wise choices in the type to buy, you can get something that fills you with joie de vivre as well as increasing in value over the years.

Particularly savvy art investors don't even end up spending that much, because they know how to find excellent pieces that are going to be worth more in the future.

I personally think it is one of the more ethical forms of investment, especially if the person who owns the piece is willing to loan it to museums so that everyone can enjoy it. Taking risks on unknown artists is at least going to help the artist even if it doesn't end up being a completely sound investment.

By lluviaporos — On Feb 05, 2014

I really liked a quote that one of my friend's posted on Facebook, which said something like "If you're not spending money on art, you aren't doing it right".

And I have to admit I think of art as being a fairly extravagant purchase. Anything that is good enough to spend money on is usually out of my casual price range.

But art is one of the best things about life. So I think I should just bite the bullet and spend a little bit on it.

Share
https://www.smartcapitalmind.com/what-are-the-benefits-of-investing-in-art.htm
Copy this link
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.