Buying art for the first time can be scary and weird. Apart from looking at as much art as humanly possible, in order to find out what we like, we newbies tend to feel much more comfortable when knowing a thing or two about what’s important when buying art. Art historian and experienced art advisor Ruth Polleit Riechert has written the ultimate guide for people new to collecting. From deciphering art market terms and recognizing quality in artworks to understanding price mechanisms in the often intransparent and volatile art market - “Buying Art” has got you covered.
Here are our five takeaways from her book “Buying Art” by Ruth Polleit Riechert, which is now available in German.
#1 Talking ‘bout a revolution
Like many other industries, digitization has made the art world more accessible, and information on what’s available at what price becomes much more transparent. Information means power and with that power, art market intermediaries that stand between the producers (artists) and end customers (art buyers and collectors) are no longer the ultimate gatekeepers for everything that gets traded on the market. New(ish) market players like online galleries (like Saatchi Art), auction aggregators (like liveauctioneers.com), and marketplaces (like Artsy) further make art available more widely. We can now discover and buy art from around the world and potentially get more value for our money once we understand how we can navigate the (digital) art world.
#2 No business like art business
The global art market has a sales volume of around $64 billion pre-corona and in 2020 shrank to an estimate of $50.1 billion. About half of that amount is unpublished sales and about 25% of the total was sold online in 2021. The art market is divided into primary (first-time sales of an artwork by an artist or their gallery) and secondary market (resale of artwork via auction house, gallery, or other ways). What distinguishes the prices for an artist's works is whether or not that artist was able to receive an acknowledgment by the public (influenced by gatekeepers such as curators, museum directors, gallerists, art critics, and journalists) and is present in the art market where their work is being bought repeatedly by ideally influential collectors.
#3 How to put a price on art
Price building in the art market often appears as a mystery to art world outsiders. It firstly depends on the artists’ career stage: Young talents and emerging artists’ works sell between around $3.000/5.000 to $10.000, established mid-career artists for up to $100.000, and the top 100 best-selling artists for over $1 million (very few exceptions go beyond that mark). In the primary market, you can make your own assessment by applying the “factor calculation” for physical works: (height x width) x factor = price. Art school graduates usually have a factor between 10-13. If an artist is represented by a gallery, the factor will rise. Price boosters are exhibitions, press articles, art prizes, but also the innovative power of works (like Andy Warhol’s innovative way to use silkscreen).
#4 But what is good art, anyway?
When it comes to quality factors we should not only consider an artist’s CV but also the quality of their art. When looking at the works of early-career artists, we should ask questions of originality (how innovative is the work and underlying concept), authenticity (own style), versatility & coherence of the entire oeuvre, proposition (something to say or even a vision), and technique (being good at their craft). To be able to compare those quality aspects, we must take a lot of time viewing art, talking about art with artists and experts, and learning how art is made and about its history. But it’s also important that we follow our instincts and trust what we like when we look at art.
#5 Is art investment the next big thing?
Most art is unsuitable for investment, and the rest must be carefully dug out. Art is non-fungible and illiquid, does not really create dividends or cash flows, and the market remains opaque, unregulated, and prone to forgery and fraud. But, it’s also great inflation protection, tax-friendly, portfolio enhancing, and likely the most fun and interesting asset class out there. The more established an artist on the market is, the less risky the investment (eg. Warhol or Basquiat, but not without risk as the latest revelations on Basquiat forgeries show), investing in early-career artists is much cheaper but highly speculative. The best thing you can do to start investing in art is to invest in yourself, in the development of your knowledge about art and the art market.
If those five points were as helpful to you as they were to us, order Ruth’s book (available in German) here. And if you like this article, please do share it with a friend who you think could benefit and subscribe to the artlemon newsletter.
Ruth Polleit Riechert
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