Pablo Picasso once said that the purpose of art is to wash the dust of daily life off our souls. It goes without saying that owning art is something that brings joy to the person who owns it, but there has always been public interest in art as an investment and an asset.
And we’re not just talking about art by the old masters or famous contemporary artists: a painting made by a South African rescue pig, aptly named Pigcasso, recently fetched R24 000.
That being said, not everyone has cash to spend on a painting by a pig, and all too often we think that art is a luxury that only the super-rich can afford.
Counting Coins spoke to Elani Willemse, business manager for Dionysus Sculpture Works and freelance curator, to find out if investing in art is something to consider when you’re looking into expanding your investment portfolio.
Looking to invest in art? Start here.
When it comes to investing in art, first-time buyers should like what they’re buying, first and foremost, says Willemse.
“Spending a potential fortune on a piece of art that doesn’t necessarily resonate with you is redundant, especially since you have to live with this artwork in your home. Art is a very subjective thing, and just because someone else likes something, it doesn’t mean that you share their sentiments about that specific artwork or artist.”
According to Willemse, art galleries are a good place to start looking, and there are a number of Gauteng-based art galleries who focus specifically on emerging and mid-career artists, among these Lizamore and Associates, 198 Long Street Art Lovers and No End Contemporary.
“Art fairs are also a great place to find investment gems. A particular favourite of mine is the Turbine Art Fair, which provides the young collector with a wide variety of affordable artworks to choose from, the rule being that all artworks at the fair must be priced below a certain threshold.”
“Then, of course, there is a sort of ‘guerrilla’ movement at the moment where artists are beginning to form collectives to help create their own opportunities. Groups such as the Dead Bunny Society, the Found Collective and No End are taking the art industry by storm by curating their own art exhibitions in re-appropriated and alternative exhibition spaces – all by young artists, for young artists, and these are great places to scout art.”
Independent artists also frequently use online platforms for marketing purposes.
“With new advances in technology, the art industry as we once knew it is currently in a state of flux. More and more artists are using social media platforms to promote their art and often sell artworks in the process. I know of a couple of artists who have made international sales through social media platforms, and that is the wonderful thing about technology: it makes the world smaller by bringing the artist closer to a global client base,” says Willemse.
“I have also heard of collectors who make a point of attending fine art graduate exhibitions at universities every year, as this has led to a couple of lucky finds. These exhibitions showcase a wide array of emerging talent and with some luck, you can pick up work by a future investment artist for an absolute steal. The trick is to constantly expose yourself to great art, and in doing so, develop an eye and instinct over time.”
How do you identify art that is worth investing in?
Willemse says that there are a few principles in the art industry that help the potential collector to determine whether an artist is worth investing in. These “mechanisms of fame” are things like the educational background of the artist, art residencies attended both locally and abroad, awards received, competitions participated in, and exhibitions and affiliations with other artists.
“One can also look at press coverage and other print media such inclusion in books and catalogues. Finally, an affiliation with established art galleries is a major factor to take into consideration, as well as representation in esteemed corporate, private and museum art collections.”
Which mediums are more affordable?
The medium of a piece of art naturally has an effect on how much it costs, says Willemse.
“Sculpture tends to be a more expensive medium, whereas pen, charcoal, prints, and watercolours are more affordable artwork mediums. The scale also plays an important role in pricing. I like to collect miniatures, as they are much smaller in scale and therefore gentler on my pocket. This allows me to own one or two works by great artists which I otherwise would not have been able to afford. Prints are also a great place to start, as they are less expensive than an original oil or watercolour painting. With a smaller edition size, it still makes for an excellent way to own art by a well-known artist.”
Willemse says that many artists and galleries build a buffer into their prices to be able to negotiate some sort of discount with a potential buyer.
“However, I would never push for more than 10%, as this ‘loss’ is carried by the artist as well.”
When can you expect a return when investing in art?
Wealth manager Citadel has developed the Citadel Art Price Index as investing in art has become more popular in South Africa. The CAPI gives investors an idea of what the market value of art in South Africa is.
According to the most recent index that summarises the first half of 2016, the deteriorating global economic climate has also had a negative influence on the art market. However, in the latest report George Herman, Head of South African Portfolios, says that high quality art by artists Andy Warhol, Francis Bacon and Dave Koontz are assets that are deemed good-as-gold in storing value.
Which is to say, high quality art can be an excellent investment. However, it’s an investment that takes some time to pay off.
Willemse says it is very difficult to determine when the market will turn on a specific artist, movement or style.
“The expectation exists that when an artist passes away, the value of his artworks will automatically go up. Ironically the opposite happens, as the market gets flooded with work by a specific artist as people try to get a return on their investment. It generally takes a couple of years for the market to stabilize before this return is seen.”
Things to consider
Before buying art for the first time with the purpose of expanding your investment portfolio, experts recommend that you keep a few things in mind.
• What is your budget?
Like any investment, art should fit into your budget. Some galleries and artists provide the option to pay in instalments – find out if this is an option for you.
• What type of art aesthetically appeals to you?
Some collectors focus on specific artists while others stick to certain movements, styles or mediums. Take this into account: comprehensive collections are potentially very valuable. Still, whether you like an artwork remains one of the most important factors when buying art.
• Are you buying work that has potential future investment value?
Art is often referred to as a high-reward long-term investment, but only when it is bought after doing thorough research. Keep tabs on an artist’s career as time progresses – that should give you a good idea of the changing investment value of the artwork.
If you’ve done some research and identified artists that possess the “mechanisms of fame”, you are probably dealing with “good” art, and Willemse says investing in good art eventually pays off.
“This may be a sweeping statement, but in my opinion good art will always be good art. If you were to purchase a work by Diane Victor or Norman Catherine when they were still emerging artists, the investment value of those artworks wouldn’t have changed. It is only natural for an artist’s style to develop over time, but it is their skill and craftsmanship that makes them excellent artists worth investing in. This is why work by artists such as Pierneef, Irma Stern and Maggie Laubser are timeless and will always be sought after.”