How do you value your art collection?

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Should you purchase art with or without regard to its investment potential? That is a very good question. Art advisers would suggest that before you buy any art, you should investigate its provenance — or at least consider it very seriously. An item’s provenance refers to documentation about the piece to include its origin, historical information, previous owners, etc. — anything that establishes the trail back to the artist. Other factors to consider are published reviews about the artist or particular piece, documentation on how much the particular artist’s work typically sells for, who has purchased the work, has it been sold at auction, and if so, the selling price, etc. The assumption being once you’ve gathered this information and can support its value, you may then give yourself the “green light” to make the purchase and have some confidence that it has potential for financial return.

WarholOther advice you might hear from an expert is to determine if the art is deemed “good”. Because art is subjective, it would seem that would be very hard to establish. The work may have received critical acclaim, been well received in the show circuit, and some individual pieces may even stand out above the rest in the artist’s catalog, and the art and artist might be classified as “very collectible”— but does that make it “good”? We would agree, that from an investment perspective, these are serious considerations.

If you’re a first time buyer, you might find these details very confusing, complicated, and maybe even controversial. The truth is that every aspiring and working artist wants their work to be in demand and command as  high a price as possible. But most artists would also say that they want their art to be appreciated and sought after as much for its aesthetic attributes. After all, an artist first picks up a paint brush, kneads a hunk of clay or carves a block of wood for the sheer joy of creating something out of nothing. It cannot be denied that the feeling of having created something with a fingerprint individual only to that artist, doesn’t have a price tag.

And then there another reason to buy art — for its sheer beauty and the pleasure it gives you every time you look at it. Do you get lost in the color, the scene, the texture? Are you in awe on how the piece was executed? Do emotions rise up in you when you see the piece; does it reveal memories like nothing else can? If you answer yes to any of these questions, consider that art purchased based on emotion has as much value as that purchased by algorithm. We would validate the argument that if you intend to see it and live with it every day, you want to select artwork that moves you and delights you every time you encounter it. We would also agree there is satisfaction in knowing if you ever wanted or needed to sell your art, you would realize a return. In the end, whether based on an investment outcome or pure aesthetics, we hope your art collection, first and foremost, brings a smile to your face!

To learn more about how Herb and Dorothy Vogel amassed their very extensive art collection, read our blog “Two unlikely art collectors” . If you want to shop for art because it moves you explore the hundreds of artists websites all very the web.

Of course there’s room for a blend of these approaches. If you would like to learn more about art investing, here are a couple of interesting articles to check out:

The Top-Performing Alternative Investments: Fine Art

Forbes Magazine: Ten Expert Tips For Investing in the Art Market

From $1000 to $15,000,000—read an interesting article on Andy Warhol’s “Campbell’s Soup Cans”.


Time to “fall clean” your art

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Sometimes, or maybe most of the time, we purchase art, find a place to display it, then forget about it. We don’t always think about “fall or spring cleaning” these valuable and precious pieces, but a little attention will go a long way to insure their longevity and appearance.

Regarding paintings. Hopefully your paintings, in any media, are not hanging in direct sunlight. Sunlight may fade watercolors, drawings, textiles and ink, and may also yellow the white areas of the paper. Heat from the sun (or other sources like heat vents) can compromise the integrity of the paints. Changes in heat and humidity can cause paper to buckle and stretch and once this happens, the damage could be Red6permanent. So maintenance tip #1: Be sure you art is placed in a neutral climate zone of your home; out of direct sunlight, and away from heat and moisture sources. The only exception to this might be glass, pottery and some metal. Always ask about the best way to display your art when you purchase your piece.

Once that’s resolved, the rest is easy. Dust you artwork every now and then using a dry, soft cloth. Never use chemical dusting agents. If there are relief surfaces that a dust cloth can’t reach, try a clean, soft artist brush in a size suitable for the piece. Using a brush is also great for pottery, carvings, basketry, impasto paintings—anything with a textured surface. Sometimes a brush won’t do, so a hair dryer can be a good option. Be sure to use a cool setting. A hair dryer is a great tool for “dusting” textiles and natural fiber. Aim the dryer from behind to blow the dust out of the piece.

Framed art should be taken off the wall periodically and the back dusted. You would be amazed at 6744.31348the cobwebs that can make a home behind wall art.

Glass and ceramics might possibly be rinsed with water, but be sure to line the sink with something protective in case you lose your grasp. Some basket and wicker work should be wet occasionally as part of its routine care.

Should you polish metal art? That depends. If unsure only use one of the methods above or call the gallery where your piece was purchased to find out. Many metals develop a patina over time, which is often desirable. For bronze care, see our article, Taking Care of Your Bronze Sculpture.

Your art is a treasure and investment that you will want to enjoy for years to come. Consider the care and keeping of your art a gesture of love!

Selling your art on the secondary market

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We often have clients come to the gallery wanting to learn more about a piece of art they have inherited or acquired in some other way. Sometimes they do not know who the artist is or its provenance; sometimes who the artist is, but nothing more. When in question, we try to offer suggestions that will help establish who the artist is. At this point we would make a referral to an appraiser or auction house for help. Antique stores often have in-house appraisers and have regularly scheduled appraisals (think Antiques Road Show).

3toiNIf the artist is in fact alive, we suggest attempting to contact the artist personally. If not, we recommend trying to locate the trust charged with handling the artist’s work. With any luck the artist has a website with contact information or gallery representation which should be able to assist with valuation and selling the piece on the secondary market. If you are unable to locate any direct contacts, we would again send you to an art appraiser or auction house as a resource.

If you are interested in actually selling the piece be sure to do as much research as you can to determine the market value of the artwork. Good resources are on the internet, but start with the artist or gallery representative first. Just search for the artist or name of the piece. With a little digging you should be able get some idea of its worth. Often the acquired art is from another part of the country. In that case we suggest they contact a art local museum or even historical society. Generally speaking this might be the best resource for finding an expert that’s familiar with the artist’s work. In Portland, the Portland Art Museum, PAM Rental Sales Gallery, or Oregon Historical Society are great places to start.

The 1,000-year-old Chinese bowl bought for $3 or less and sold by Sotheby's for more than $2.22mIf you do not want to sell your piece on your own there are benefits to using an auction house. These establishments generally have a large following and a sound clientele who will be knowledgeable and anxious for an acquisition. You can count on the auction house to vigorously advertise the auction and perhaps publish a catalog where your piece will be featured. If you decide to use an auction house, you can have some say in your rock bottom price, but keep in mind, auction houses not only take commissions, but often charge the buyer a fee as well, creating a scenario where the bidding might reflect those aspects. The auction house will do its best to create the best possible environment for a solid return, but anything can happen on auction night. You never know if you’ll walk away with a slim profit or an unexpected big sale. Nevertheless, if simplicity and a quick sale is what you’re after, this is a solid avenue to pursue.

If you decide to go it alone, learn as much as possible about the artist and the piece. The obvious ways to sell would be the-new-ebay-logothrough EBay or Craigslist, but there are several online art auction sites that you might have success with. Some will charge a fee or a small commission, others nothing at all. For any of these options, remember you will be responsible for actually shipping the item, so consider that in determining your price. The good news is if no one makes you an offer you can live with, you can always hold on to the piece and enjoy it for a while longer. As with all investments, the market does fluctuate, so you may have better luck another time. 

Some antique shops, auction houses and appraisers in the Portland area:

Troutdale Antique Mall – 503.674.6820
Monticello Antique Mall
Gary Germer and Associates
Pioneer Auction Gallery
Randolph E. Osman and Associates
West Coast Antiques
Antiques Road Show online Experts Library

Image and recently in the news: This 1000 year old white bowl was bought at a garage sale for $3 and sold at Sotheby’s for $2.225m, after it was recognized as a rare Chinese relic from the Northern Song dynasty. Originally purchased at a garage sale in 2007, the bowl had been displayed in the living room for several years before the owner became curious about its origins and had it examined. Image credit: AP

Making tax season more palatable

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Do you revel in the prospect of starting the New Year only to have your renewed optimism quickly dashed at the thought of tax time? Yes, it’s tax time and you may not realize it but investing in art and donating could be the perfect vehicle for your long term investing strategy. If you were unable to invest in 2012, make art investing in 2013 your goal.

Stock-MarketIf you think you’re not in the art investing “league” you might want to reconsider. Some statistics from Artprice: “some 70% of artwork sold at auction between January 2008 and June 2009 was priced at $5000 or less. During that same period affordable art in this price range gained 60% in value, while higher end pieces gained a staggering 150%.” Keep in mind, this was at the height of the financial downturn. Of course the art market, like any other commodity is driven by a variety of unpredictable factors, so do your homework. Read, research, follow auctions, consult with auction houses and experts, and be sure to authenticate any piece of art you intend to acquire as an investment.

If you would rather invest in art in a less risky way, art funds may be for you. According to Minyanville.com, in 2010 art funds out performed the S & P 500, translating into compound annual returns of 4.8 – 3.5 %.  Since 2008, 11 of the 20 highest prices ever paid at auction have occurred. Phillip Hoffman, Founder of the Fine Art Fund Group advises to allocate no more than 5% of your portfolio in art. The cons: art funds can have very high investment minimums. If you not still not sure you can or should invest in art, read our blog article, Two unlikely art collectors. You’ll learn how Herb Vogel, a US postal worker and his wife, Dorothy, amassed  thousands of pieces of art during their lifetime and donated their acquisitions prior to Herb’s death.

You can also enjoy financial gains from you art investments by donating to charitable organizations. Thanks to the 1995 Tax Act, fine art that you have owned for at least a year and donated to a charitable organization, may be claimed as a deduction at its appreciated value. Prior to 1995, charitable donations of fine art could only be deducted at the original purchase price. A word of caution: be sure to do your due diligence and confirm the receiving organization plans to hold on to the art for a minimum of two years. If the organization plans to profit from the sale of your donation prior to two years, you will only be allowed to claim the original purchase price. As with all tax situations, there are many individual factors that will dictate your tax liability, so be sure to consult a tax professional.

If you love art and would like to explore its investment potential, become familiar with the trends and study the market. With any luck you can enjoy the best of all worlds. Editorial advice—research, be smart, don’t invest your nest egg, but buy the best you can afford.  Most art investment advisors recommend purchasing art as a long term goal rather than a short term investment. As with all investments, remember there are no guarantees. With that in mind be sure to invest art pieces you love, since you may live with it longer than planned.

For some tips on buying art, see our blog article, I’d love to buy that piece, but…

Other resources courtesy of Minyanville.com:

Artnet: This website offers investors the chance to bid on and purchase various works of art from artists all over the world.
Artprice: A leading resource for art market information from all over the world, this site also offers investors the opportunity to hop in on various auctions and get their feet wet in the industry.
MeiMoses: This site focuses heavily on the financial side of things, as it even has its own art index which it pits against major financial benchmarks to compare historical performance.
Christie’s: Featuring live auctions all over the world, investors will be able to find art of all kinds on this massive site.
Sotheby’s: Another site in the same vein as “Christie’s” that will be good for various investment types from all over the world.

References: NY Times, May 3, 2012; CNBC.com, October 8, 2010; Minyanville.com