While the pandemic has had wide-ranging consequences for many areas of our lives, one unexpected silver lining is that more people are starting to see the benefit of art as a viable form of alternative investment.
In a year marked by economic uncertainty, many were reluctant to invest in traditional asset classes such as stocks and property and instead looked to art as a value-preserving asset as they sought to diversify their portfolios and mitigate these precarious times. According to DollarSprout, art consistently delivers average returns of 7.6% and, because it is unaffected by how the financial markets are performing, is a much more stable investment.
Trends within the art market tend to be consumer-driven, with collectors, galleries and auction houses all shaping what will become the next big thing. With the digital transformation of the art world accelerated by the events of the pandemic, along with more experience-driven millennials buying art than ever before, it is important to take stock of emerging trends as we begin 2022 so that you can get the most out of your potential investments in fine art.
Compared to other movements in contemporary art, street art is still relatively young and evolving. It traces its origins back to the 1960s and in recent times has become one of the most notable forms of social and political commentary in the art world, appealing to younger millennial collectors in particular.
Established names within the street art movement such as Banksy, Invader and Shepard Fairey naturally fetch high prices at auction, as when Banksy’s shredded work “Love is in the Bin” sold for more than £18.5 million at Sotheby’s earlier this year and works from other key players consistently exceed expectations in both the public and private markets.
While these prices may be out of the reach of many collectors, these headline-grabbing auctions have also sparked interest in other new and emerging street artists, a phenomenon dubbed “The Banksy Effect.”
With new artists constantly popping up, street art offers the perfect opportunity for investment and diversification. Those who buy from the right names at the right time can capitalize on that window of opportunity before prices begin to soar and benefit from buying in early as the artist’s value and demand rise.
Inspirations And Collaborations
For anyone serious about art investment, it is important to immerse yourself in the art world through publications, events and — as art moves increasingly toward the digital — online communities. This makes it easier to spot trends as they develop and see where market interest currently lies.
Looking to who other great artists are talking about, showing interest in or collecting, can be illuminating and give you an indication of the artists, areas and movements worth investing in, even if the styles are disparate. Take, for example, street art legend and the “father of stencil graffiti,” Blek Le Rat, citing the public works of Richard Hambleton as one of the main inspirations for his iconic black rat stencil image. Anyone looking to expand their knowledge in contemporary art would do well to take note of who other artists are paying attention to.
As the art world continues to broaden, the growth of collaborations between contemporary artists and fashion designers also reflects a shift in how art is being perceived in relation to popular culture. Whether it is the recent collaboration of GucciGhost, aka Trevor Andrew, and Gucci on their autumn collection or Louis Vuitton working with artists such as Cindy Sherman, Richard Prince and Yayoi Kusama, these collaborations are instrumental in bringing art to a wider audience and opening up investment opportunities.
The works of blue-chip artists may very well be out of the price ranges of most, especially those who are new to collecting or are just beginning to build their investment portfolios in fine art.
However, collectibles such as limited-edition prints are a great way to begin an art collection, and I’ve observed that they are seeing a surge in popularity among those with more modest budgets. Art editions represent a way for a whole new generation of younger collectors to get a foothold in the art investment scene, without breaking the bank.
Art editions such as etchings and lithographs differ from reproductions in that they are works of art in their own right and are collected like any other artistic medium. They are an affordable and accessible way to access highly promising artists without the prohibitive price tag of an original work while also possessing good investment potential — as the reputation of the artist grows, so will the value of the print.
Limited edition prints are also cheaper from a maintenance perspective, making them a far more comfortable investment for those just starting out their collections, as they do not come with the hefty costs of restoration and maintenance that could result in the depreciation of an original work.
There has never been a better time to invest in art, and the interest in art as a viable asset is only set to grow in 2022. While it is natural that art trends will come and go, immersing yourself in the art world and keeping an eye on what artists and the community at large are talking about is key to spotting profitable developments within the market.
The information provided here is not investment advice. You should consult with a licensed professional for advice concerning your specific situation.