Art has the ability to stir our emotions, not unlike music, creating reactions that may be universal as well as uniquely personal. Great art has been celebrated, enjoyed, and even coveted, but could it also have a more practical purpose? For many investors seeking to diversify portfolios for financial or personal reasons, the answer is “yes.” Traditional investment portfolios are often associated with stocks, bonds, and real estate. And, as covered in an earlier article, wines are also present in some investment portfolios. Artwork is another candidate for those hoping to see gains. The trick is to develop a plan and follow it faithfully.
The first step is to determine why you want to acquire artwork. If viewed strictly as an investment, asset appreciation would be an expected goal; this would also be a positive outcome for artwork collectors, beyond the pleasure of owning the art. Because art created by the masters rarely depreciates in value, it can also represent a tempting way to “store” cash, compared to stocks. Another motivator could be a desire to preserve and protect great works of art for the enjoyment of future generations.
