An Artful Guide for the Artless

An Artful Guide for the Artless

Starting an art collection means dealing with dealers. Here’s how

The art world can be confusing place for even the most experienced of art buyers. Squishy factors as “historical interest” or “artistic integrity,” will determine whether your purchase is the bargain of lifetime or just expensive wallpaper. And if you’re just starting out, you’re at the mercy of the judgement of experts.

To even the odds, we can advise the beginning art collector. Here’s what we suggest:

Make sure that what you want is there to collect, and then collect the best in the field. If you want to collect Vincent Van Gogh paintings, you have to have a lot of money, or you will get the worst of the worst of what Van Gogh ever did, because that’s what’s on the market. To find out what’s out there, talk to dealers about finding other dealers in the same field, turn to international directories of dealers, or place ads in trade papers.

Establish as wide of a range or resources as possible. Not only will you see and learn more, but you’ll also be able to play the market for the best price and make intelligent price comparisons. There’s a difference between purposely playing dealers off one another – you shouldn’t do that – and asking intelligent questions. It’s like comparing cars at auto dealerships. You should ask dealers to explain why you saw something similar somewhere else for a different price.

Start by collecting an artist`s typical work. It’s a question of stability down the road – if you want things that will be liquid, you’d be well advised to go with the mainstream. At first you’ll want to find out what the artist is most famous for. Or if you like landscapes of Cape Cod, say, find out what people collect them like to have in them, and then you look for that in your pictures.

Artful Guide. Photo by Elena

Don’t confuse the work with the environment. Properly lit and displayed, even a sack of trash can look great. You can take anything – a tape measure, a can of soup – and put it up on a pedestal, light it, put it in an art gallery and you’re going to have people walk by and say, “wow that’s fantastic.” But when you get it home, all it is, is a can of soup. Take it out of the gallery environment, take it home on approval for a week. Usually you leave some sort of deposit, with no commitment to buy. On the other hand, unless you’re really experienced, it can be hard to see how beautiful something can be. At a garage sale it may look like a piece of junk, but a collector who knows what he’s doing will clean it up and display it properly and it’ll look like a million dollars.

Don’t take bulling. If you’ve got an art dealer who’s giving you a hard time, leave. When you get stuff like “The artist is almost dead” or “We sold six of these last month for X dollars,” just get out. If you feel pressure in any sense to do something, that’s a warning sign that you’re in the wrong place.

Start by working with the experts. Avoid galleries without direction of focus. These are good places to go for experienced collectors because chances are something’s going to slip through. But galleries like that are repositories for whatever people who are running around the area happen to find at flea markets and estate sales – the only focus they have is getting things they can mark up and sell for more. Those galleries have their place, and if you have experience, you can find bargains there.

Don’t ask, don’t tell. Forgeries are a touchy area, because you don’t want to call in one dealer to comment on another’s painting – that would be a conflict of interests – he would rather sell you one of his paintings. As you spend more time collecting, try to meet people – museum people or scholarly types, real true collectors who are not overly concerned about the money and who will give you a straight dope. If you recognize a forgery, don’t point it out. You can get involved in legal problems and you can make enemies fast.

Don’t let investment factors weigh too heavily. Art is immediately liquid only if you want to take a severe hit. If you buy and sell stocks and bonds and the like, you normally pay a 1 to 2 percent commission. If you pay a 20 percent commission to buy a work of art and then pay a 20 percent commission when you sell it – and those are very modest commissions in the art world – the art has to increase in value 40% before you see your first penny of profit.

Don’t try to chisel on prices, unless you have a really good argument. You shouldn’t worry about letting on that you really like a painting. A poker face won’t work anyway. If you are the type of person who likes getting a deal, dealers will bump their price up a bit when they see you coming, and then drop it down to what they wanted to sell it for in the first place. Or, worse, they’ll just sell you medium quality art that they would rather have out the door anyway. Sure they flex on the price a little bit, but you are not going to get the good stuff. You have to work for that – there`s a lot of competition.

Art Collection. Photo by Elena

The Small Print on Prints

They decorate a wall, but stocks do a better job of decorating a portfolio

Most art forms defy financial analysis because each work is highly individual. Prints are a different case because they generally are created in batches of 50 or 100. A 1993 study by University of Toronto economist James Pesando took advantage of this uniformity by analyzing the sales between 1977 and 1992 of 27, 961 prints by 28 modern artists, including Picasso and Matisse.

The results were not encouraging. The mean return for the prints was 1.51 percent annually, whereas a low-risk government bond would have gotten you a 2.54 percent return. Wily investors can still make a killing – annual returns on the prints ranged from a disastrous -35.34% to a healthy 47.18 percent. The method? Similar prints sold within a few weeks of each other varied in price by as much as 30 percent