It's easy enough to dismiss art investment as an option that's reserved solely for the rich and the powerful, or one that you can make a quick buck out of should you get into it. All common misconceptions, of course, of a oft-misunderstood investment option that, in recent years, has seen burgeoning interest from not just international buyers, but a young and rapidly growing Asian market.
"Collectors come from all age groups," explains Daniel Komala, CEO of Larasati, a regional auction house with a specialisation in Asian art. "The younger ones tend to go for contemporary works more. But usually after a good five to ten years of collecting, many would start collecting works by the established (modern) masters."
And it's the less volatile nature of art investment that has attracted these discerning investors. "Art is a neutral currency and in many ways has no borders. Today, a work by an Indonesian 'master' artist for instance, could easily be found in auctions held in Singapore, Hong Kong, London or Amsterdam."
Whether you're an art enthusiast who's looking to capitalize on your passion, or even just someone who's just had their interest piqued from this article, Komala offers five pointers that could help you kickstart an extremely lucrative portfolio.
1. Art investment is more resistant to changes in the economy.
"Good pieces of art stand the test of time better than many other forms of assets. They are very mobile and their prices are more resistant to economic crisis," Komala elaborates. "Besides, unlike property, you could transport art around the world with relative ease to find a more favourable market when the going is tough in a particular market."
2. Of course, that's not to say that art investment is completely risk-free
Obviously, any sort of investment carries with it an inherent risk. In the case of art investment, it's a combination of factors that need to be paid attention to. "Although art market prices have a basis similar to that of the stock market, an art market prediction is not like an economic prediction which can be scientifically analysed using ample hard data. Rather, it's more like a combination of analyses, intuitive observations and educated guesses."
3. The track record of any artist you're thinking of investing in is the most important.
"The balance sheet of an artist is basically his or her track record. The most important is perhaps to find out if the artist has participated in some prestigious exhibitions and if there have been any significant publications on his/her works." Naturally, artists whose works are widely collected by important international art institutions and private collectors are worth more.
4. Like any other investment, it's essential to do sufficient research.
According to Komala, art investment is essentially a "medium to long-term investment" that lasts five to ten years. Before making that first purchase, it's essential to keep these tips in mind.
Visit reputable galleries and auction houses. Find out whose works are trading actively in the market. Set your budget, and shortlist your picks and study them before making your final decision on what/who to invest in. Should you feel that you need further consultancy, do visit art consultants with good track record. Among others is One East Asia.
5. Don't feel restricted to just the international artists when considering your options for art investment.
Southeast Asian art has risen in popular in the recent years as a result of the "spillover effect" from the boom in Chinese art. "And yet, the most expensive art in Southeast Asia costs only a fraction compared to that of Chinese art," Komala says. "What makes it even more attractive is the fact that Southeast Asian art is not only on par in terms of quality, but also has become more internationally collected."
Larasati will be presenting 45 carefully selected pieces at an art auction happening this Saturday 26 February 2013, 3:30pm at the Marina Bay Suites Gallery at Marina Bay Financial Centre Tower 1, Level 4. Expect artworks by renowned Southeast Asian and Indo-European masters, and selected works by traditional Balinese artists. For enquiries or more information, please contact +65 6737 2130 or email email@example.com.