Art Investment

Collecting Fine Art - First Steps

Share

Written by
Bálint Ferenczy

Follow on Twitter

6 February 2019

View all blog posts

Some of us start with stamps, others with coins. Regardless of the actual object or artwork, the urge to collect is common in all of us, but turning a childhood hobby into professional collecting takes desire, determination and dedication.

stamps collectionNorman Rockwell Boy Scout Painting Stamps Collection via Picclick

For centuries, collecting art has been more of a privilege for a select few. However, with the advent of the World Wide Web, buying art has become easier than ever before. A previously opaque market, where information access was limited to several key players and influencers, has now become more accessible, regulated and democratic. Consequently, the art market has evolved significantly over the past two decades, and artworks have become tangible assets not only for art enthusiasts, but also for financial investors. The “big four questions” have nonetheless remained the same when making the decision to start collecting art: Where, when, how, and what to buy?

 

Taking the plunge into collecting

Regardless of your background, collecting art is much more than just following instincts. Understanding what you like and educating yourself about a specific period or artist is just as important as defining your goals in collecting. Indeed, people collect art for various reasons. For some, art is pure investment, just like any other business. For others, it is more about prestige and pleasure, being at the forefront of contemporary culture. In any case, starting your collection begins with defining your personal taste.

 

What to buy?

Let’s say you have decided to acquire a masterpiece by the world-famous Pablo Picasso. This would be a sound investment in a well-established artist with proven auction results. Naturally, you would have to invest a much larger sum, but it would be much less risky than investing in an artwork by an emerging talent.

 

Where and when to buy?

As discussed in our earlier blogpost, artworks could be purchased in the primary market, straight from the artist or from his/her representing gallery. In the case of Picasso, of course, this is not an option anymore. Therefore, we have to look for a work in the secondary market, where the seller could be a broker, a specialist dealer, a gallery or an auction house.

Finding a good work by Picasso would take a lot of research. From art fairs, to auction houses, from agents to private galleries, it is quite a task to find his works. Checking online marketplaces such as Artsy could also be helpful in finding the best possible deal. Luckily, more and more tools are now available to help with a collector’s search. Only a few years ago, when a dealer gave us a price, we would have to trust him or her. Nowadays, with the existence of price databases, we have a good chance of finding supporting auction results. Artnet and Artprice both provide reliable information about sale prices.

 

What’s next?

Collecting, however, does not end with just finding the desired piece. Behind-the-scenes administration always remains fundamental. Just as keeping our finances in order, it is equally important to keep some sort of registry of the works collected. Often overlooked, but later regretted, finding a good collection management program is critical to the longevity and relevance of any art collection. Keeping an inventory is a necessity rather than a luxury. An inventory detailing artworks’ descriptions, sales receipts, provenance, consignment agreements, conservator reports, etc. would form the basis of collection administration. With several options available on the market, collectors can choose between multiple collection management software products, such as Collector Systems or Collectrium. (You can browse for several other options on the Capterra webpage.)

Once you have successfully kept all these points in mind, you will be well on your way to becoming a professional art collector.

 

Article featured image: Paul Cézanne "The Fisherman (Fantastic Scene)" (1875) via the Metropolitan Museum of Art.

Topics: Art Investment

Bálint Ferenczy

Written by Bálint Ferenczy

Bálint has an MA degree in History of Photography from Sotheby’s Institute of Art, London, as well as a degree in Art History and Arts & Cultural Management studied in both Hungary and the USA. The primary and secondary market experience he gained working at Sotheby’s Auction House, several galleries and while on the curatorial board of the József Pécsi Photography Grant, fills him with confidence to advise collectors about what their collections strategically need. Bálint is a guest lecturer at the Moholy-Nagy University of Art and Design (Budapest) and a regular consultant and researcher at Műértő – The Hungarian Art Newspaper focusing on the Central and Eastern European region. From 2017 he sits on the board of the Studio of Young Photographers, Hungary and was a jury member of Capa Center’s 2018 Portfolio Review. Bálint is currently completing a Ph.D. programme in Business Administration at the István Széchenyi University, researching public art funding models.

Please read the following disclaimer >

This blog post is illustrative and for informative and general education and discussion purposes only. It is not, and should not be regarded as “investment advice” or as a “recommendation” regarding a course of action, including without limitation as those terms are used in any applicable law or regulation. This information is provided with the understanding that with respect to the material provided herein (i) MAECENAS is not acting in a fiduciary or advisory capacity under any contract with you, or any applicable law or regulation, (ii) that you will make your own independent decision with respect to any course of action in connection herewith, as to whether such course of action is appropriate or proper based on your own judgment and your specific circumstances and objectives, (iii) that you are capable of understanding and assessing the merits of a course of action and evaluating investment risks independently.. MAECENAS does not purport to and does not, in any fashion, provide tax, accounting, actuarial, recordkeeping, legal, broker/dealer or any related services. You should consult your advisors with respect to these areas and any material with regards to investment decisions. You may not rely on the material contained herein. MAECENAS shall not have any liability for any damages of any kind whatsoever relating to this material. No part of this document may be reproduced in any manner, in whole or in part, without the written permission of MAECENAS except for your internal and/or personal use. This material is being provided to you at no cost and any fees paid by you to MAECENAS are solely general educational purposes. All of the foregoing statements apply regardless of (i) whether you now currently or may in the future become a user of MAECENAS’s platform or products and (ii) the terms contained in any applicable contract between you and MAECENAS.

Up Next

Art Investment

Strong Fundamentals Are Key to Growth in Crypto Projects

The past 18 months have been a time of extremes for blockchain businesses and crypto tokens. From the euphoria of late 2017 to the “crypto winter” of late 2018, the industry has ridden ups and downs that have left many outside observers wondering what to make of the space.

Keep Reading

Alternative Investment

,

Art Investment

Art Tokenisation Was a Hot Topic at Art Basel Miami

There are few events that command the attention and set the tone of the fine art world like Art Basel. Now, blockchain technology has begun to turn heads among the the event’s attendees, many of whom are counted among the leaders of the space.

Keep Reading

Art Investment

How art investment compares to other alternative investments

Looking to make an alternative investment?

Keep Reading