The Art of Investing in Art: How to Know Work Will Blossom or Flop

An artist’s representation greatly impacts your ROI

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Caligraphy, 1994. Rasim Babayev

Collectors often wonder how to differentiate between an emerging artist that holds long-term promise as an investment and an emerging artist that may fade away. In the art market, there is no silver bullet that guarantees an artist is going to be a good investment. However, here are a few practical measures that will increase the probability that pieces you buy at a premium don’t end up in a garage sale selling for cents on the dollar.

Choose Love

Pick art you love—every piece you purchase should pass this fundamental test. Once you decide on a style or piece that appeals to you, examine a few key factors to determine if it will appeal to your investment portfolio as well.

Exclusive or Open Relationship

Is the artist showing in multiple galleries or venues throughout the city or does the artist have exclusive representation? Does the artist have an agent or someone who is fully committed to his or her development? Ideally, although not always necessary, the artist should have obtained exclusive representation.

Art galleries generally will only dedicate time and resources to artists who have exclusive representation with them. If there is exclusive representation, then you know there’s a two-way commitment between the gallery and the artist. This increases the chances that the gallery is actually devoted to growing and selling the artist’s work.

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Portrait of an Art Dealer, 2017. Michael Carson

Type of Exclusive Relationship

What type of gallery represents the artist? Is the gallery more focused on selling inventory or in working hand-in-hand with the artist? You can discern this by learning how many artists a gallery has. Art galleries can’t feasibly provide individualized attention to many artists simultaneously. There will be an obvious detachment from the artist and a greater focus on inventory if a small gallery is working with 30 or 40 artists.

Who else does the gallery represent and where does the artist fall within that list? Is it mainly emerging artists? If so, what’s the gallery’s track record for nurturing and growing winners? If the gallery represents a mix of artists, does the gallery pair its emerging artists with more established ones? When a gallery actively engages with its artists and creates and promotes a community, the emerging artist benefits from having his or her name associated with more recognizable ones. This will also enable them to network and receive support from more established artists. Finally, is the gallery more focused on local happenings or does it have a global reach? You want a gallery that’s committed to the development of the artist and that puts emphasis on expanding relationships critical to the artist’s development and success.

Acquisitions

Have any pieces by the artist been acquired by museums or noteworthy private collections? Major successes like these solidify the artist’s standing and stabilize the price of his or her artwork. Many variables play into this, but there is something to be said about purchasing art from an artist that has gone through the acquisition process.

Life Stage

The age of the artist helps to determine a piece’s investment value. There is a lot of worth in the aging emerging artist, including quality of the work, individual artistic development, sociocultural relevance and aesthetic power. However, an artist in his 70s or 80s who isn’t in a major museum or lacks representation by a gallery may not have the time or resources to fully exploit the shifting trends of the current art market to his or her advantage. Although, thankfully, there are always exceptions to this.

Investigate a gallery or agent and see if they are genuinely committed to the development of the artist. Throughout history, art dealers and gallerists have been instrumental in bringing into prominence artists that may have otherwise stayed in relative obscurity. Without this important component, all bets are off.

Georges Berges is the owner of Georges Berges Gallery in SoHo, NYC and of Berges Creative Group, an art advising firm dealing primarily with the secondary market. Follow him on Twitter @georgesberges and Instagram @georgesbergesgallery.