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How to Navigate the Challenges of Collecting and Investing in Art

  • Writer: Hilary Tsui
    Hilary Tsui
  • 5 days ago
  • 5 min read

Updated: 2 days ago

Paris+ par Art Basel 2024. photo by Hilary Tsui
Paris+ par Art Basel 2024. Photo: Hilary Tsui

Collecting art is an incredibly enriching experience, and starting your art collecting journey is indeed exciting! Many people got started due to their personal passion for art, others see it as a form of investment. No matter what the motivation is, there are inevitably challenges at different stages of collecting. Why? This really comes down to the nature of the art market.

 

The art market is one of the most complex, yet unregulated commercial terrains, marked by its jargons, diverse participants, intertwined relationships, and its exclusive nature. Not to mention, the gazillion artworks being offered in different market places. To navigate in this glossy, yet opaque art market, it is easy for people to feel overwhelmed, especially without proper guidance. Even seasoned buyers would encounter hiccups along the way - whether it is acquiring limited works by coveted artists, or keeping up with the fast-evolving art world development.


So, to help you get a head start and stay inspired in the ever-evolving world of art collecting, here are some advice to the most common challenges:


Challenge #1: “I want to collect art, where do I start?”

This is a typical question from newcomers. We all have heard about the popular advice “Buy what you like”. This logic is fine if you have unlimited cash, or if you are only buying a few pieces at an affordable range. However, if your intention is to collect art, and want to spend your money wisely, this advice simply for buying art would not be enough anymore. Instead, I would suggest the following steps:


DO:

  1. Discover what you like: Look at a lot of art to get a sense of your preferences and aesthetic direction.

 

  1. Think about your “why”: This will help you immensely to make decisions along the way, especially to avoid “impulse purchase”. Do you want your art pieces just for decoration, or also for future financial returns? Do you want to genuinely start a collection, to engage in the contemporary art discourse and to support living artists, or do you want to dive into a certain art historical period? Your “why” can serve as a guiding light and can save you many trials and errors.

 

  1. Learn, research and define: Learn about the type(s) of art you like, research about the artists whose work you would like to acquire, and get an understanding of the art market. Define your scope of interest and pursue works of art that you resonate with and fit into that category.

 

  1. Get objective professional advice: Especially if you want to build a collection or an art portfolio for financial returns, whether you are new-comers or busy people who are short on time. Professional art advisors can help you assess, make objective recommendations, and build your collection’s value with their industry knowledge and relationships. Find one you trust, who specializes in your area(s) of interest.

 

  1. Try it out: Start with a smaller budget. Experience how it feels to own your first pieces and the satisfaction of living with the art you like.


DON’T:

  1. Forget about setting a rough budget: Even you have your taste and your why nailed down, you will still encounter lots of art that are worth acquiring. Having a rough budget can prevent you from overspending.

 

  1. Forget about the additional cost: there are costs associated with buying, maintaining, and selling art that people sometimes overlook, e.g. sales tax, shipping costs, maintenance, insurance, etc.

 

  1. Forget Provenance and Authenticity: This is more relevant if you are buying from the secondary market. Verify the artwork's authenticity and history to ensure it's not a forgery.


Enter Art Fair Copenhagen 2023 - photo by Hilary Tsui
Enter Art Fair, Copenhagen 2023. Photo by: Hilary Tsui

Challenge #2: “How can I buy art I love, but also make sure it is a good investment?”

This is the wish of almost every client I worked with. And quite frankly, it is relatable. Although collecting and investing in art has some overlap, they are driven by different motives and require different sets of skills and knowledge.


If financial motive comes into play, it is when you cannot purely trust your eyes, nor rely on your own research. It is necessary to seek out professional service.


DO:

  1. Work with your art advisor: Art advisors are experts in the field they specialized in. They can provide you sufficient market information, recommendations and an analysis for you to make the acquisition decision. Make sure you understand the potential of return and risks before the acquisition.

  2. Consider blue-chip and emerging artists: If your budget allows, include both of them in your portfolio. Blue-chip artists whose work consistently retains its value and can usually be sold for remarkable prices on the secondary market. If your budget is restricted, emerging artists who are just beginning their career are much more affordable, although they are a riskier investment – but when chosen with industry knowledge and insight - it can yield lucrative returns, when they become well-known in the future.

  3. React timely: I don’t mean you should rush. However, don’t think that good investment pieces will sit around and wait for you. I have repeated experiences that clients underestimated the time sensitivity of acquiring certain works and thus missed out on some good and rare opportunities.

 

DON’T:

  1. Assume you can get any investment-grade art you want: Galleries always want to place their artists in prestigious public and private collections. For popular artists, there is always a “waitlist” (sometimes, it can also mean, the galleries are selecting their preferred buyers). If your collection is not strong enough, or if you don’t have the contacts, your chance of getting that piece you desire will be quite slim, even if you have all the cash it requires. 

  2. Buy merely for investment purpose: If your focus is solely on financial returns, art is not the best resort. Art is less liquid, and is more a long-term asset when compared to other financial investments. Instead, it provides much more beyond the financial aspect, including the emotional, personal, cultural and even social benefits.

  3. Flipping for fast gains. The practice of buying and reselling artworks quickly for a profit, a.k.a. “flipping”, is generally frown upon. It can taint one’s reputation, and hinder future purchase.


The topic of collecting art is vast and wide. This article has merely scratched the surface. What is most important to remember is that, collecting is a meaningful and enjoyable journey, your knowledge will grow and horizon widen as your collection grows. No matter which stage you are at, stay curious, be a life-long learner, take risks, share the journey with like-minded people, and enjoy the ride!


Hilary Tsui works as an independent art advisor and cultural manager and has been active in the international art sector for over 20 years. She specialized in contemporary art and has been supporting young and seasoned collectors to begin and expand their collection since 2015.


Hilary has initiated an international Collector Program with gallery tours, educational seminars, art trips, and market news to help art lovers navigate the complex art market, and to make collecting contemporary art more accessible. (More on: www.citytransitarts.com  |  IG: @artists2invest  | FB: CityTransit Art | Youtube: @Artists2Invest )

 
 
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