So you've amassed a nest egg with growth potential, but don't have quite enough for a house deposit. If investing in stocks and shares seems soulless, the art market could provide the basis for a beneficial long-term relationship - certainly aesthetically, but perhaps also financially.
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Think of the Vogels, a penny-wise New York couple, who achieved "proletarian art collector" status by acquiring a collection of emerging minimalist artists in the 1960s and '70s, paying just a few hundred dollars for each work, which proved too priceless to sell (valued in the hundreds of millions of dollars).
But leading Australian financial advisers, auction house directors and curators suggest they are the exception rather than the rule. ???Intuition, patience and possessing a great eye are not enough.
Although loath to equate art with financial gain, the Australian representative of Christie's auction house, Ronan Sulich, defers to a colleague's line, "If it's appreciated, it will appreciate".
"When asked, I always advise people to buy what they actually like, because if it doesn't make them a 500 per cent return, they can at least enjoy looking at it; something you cannot do with stocks and shares," he says.
Leonard Joel auction house's managing director, John Albrecht, also says to avoid anyone using the "investment" word in relation to buying art. His advice, in a nutshell, is: "Don't rush it; consider a story/theme; market equals auction; art equals gallery."
Albrecht believes young collectors are more global in their thinking these days, with the proliferation of art fairs, online galleries and art blogs. He recommends immersing oneself in these mediums and reading Jeff Makin's Critical Moments and Robert Hughes' Nothing If Not Critical, which will provide context, a crucial element for collection longevity.
"There is no doubt in my mind that if you set about collecting a period, genre or medium (or all three) and develop a honed approach to collecting, then what you get is a collection that tells a story and these collections will always be more prized than those that don't," he says.
Time is the most valuable commodity for any potential collector, advises Cameron Menzies, the managing director of Menzies Fine Art Auctioneers. "Art can seldom be 'traded' quickly. In almost all cases, a 'holding' period of 10 years should be seen as mandatory. Art purchased in a gallery environment is typically the artist's 'current' work, so it needs time to be assessed and appraised by the market in order to appreciate," he says.
Building relationships with those in the know is paramount for collectors. "They should subscribe to gallery and auction house mailing lists and engage their staff, who are generally charming, helpful people with a passion for the collecting journey and guiding their clients. The Australian Art Sales Digest is an invaluable online resource for tracking auction prices for all Australian artists", Menzies says.
Tom Lowenstein OAM, the founding director of Lowensteins Arts Management, has advised top artists on financial matters for more than 50 years, representing and befriending the likes of John Olsen and Charles Blackman.
Possessing natural ability and a flair for media attention go hand in hand for raising an artist's profile. But Lowenstein says unless an artist is in the realm of Boyd, Whiteley, Olsen and their contemporaries, "an artist that you may have collected for $5000, 20 years ago could only be worth $5000 today". His advice is to enlist the services of a financial adviser, dealer or consultant who is trustworthy and therefore provides peace of mind and higher-yield potential.
Knowledge is power, suggests Rodney James, an independent art valuer/consultant, exhibitions curator and collection manager, who advises art buyers to "clue up". He says registered consultants, such as members of the Art Consulting Association of Australia, should be the first port of call.
However, the most important element should be how you feel about the work. Art dealer, consultant and valuer Anna Groden advises buying an artwork that "you love or speaks to you on some level".
"The difference between art and other investments, such as shares, is that art is something you can appreciate, that is tactile and visual, as opposed to numbers on a piece of paper."
