I see that some smart City fellows are setting up a fund to invest in contemporary art, which they regard as a sure thing and a source of great potential returns. Well, yes and no. Various studies at various times have shown that on average, investments in art have been disappointing in the long term. They yield no income, and they are relatively illiquid - auctions are the only outlet for disposals and high prices quoted by galleries may very well not equate with the net proceeds from a sale.
Tai-Shan Schierenberg The Hermit 2005
In most cases, there’s very little sales history for new artists, and that discourages the top auctioneers from taking them on. Plus, there’s difficulty deciding which artists are going to hit the big time financially, and when. Artists quite commonly go through a cycle of early success, flat middle age and, if they’re lucky, an Indian summer in their older years. The best strategy is therefore to buy young and await future developments.
The second best is to seek out artists who have survived early blast-off and have steadily maintained sales at rising prices into their middle years. But my advice to would-be investors in art is always the same: buy because you love something, know why you love it, and wish to hold it forever.
Come to think of it, that’s very similar to the way the great Warren Buffet picks his business investments. So which artists in my stable do I think of as growth stars that will turn into blue chips in a currently strong middle period? For starters, try looking at painter Tai-Shan Schierenberg, sculptor and drawer Nicola Hicks and painter John Kirby - but only proceed if you love their work!
