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Building A Collection

by Michele Seekings

Artwork by Raven Roxanne & Gret Mackintosh

Contemporary art is one of the faster growing asset classes among investors. Traditionally, an asset class includes stocks, bonds, and gold, but an interesting shift in today’s high-net-worth individuals is the shift in investing more in alternative asset classes.

These alternative asset classes include art, wine, and luxury cars, and more investors have been consciously investing in art to diversify their asset holdings into luxury commodities that parallel their lifestyles. Simply put, they’re investing in things they like.

And it looks like this may be paying off. Art was the fastest luxury appreciating asset class of 2018. Art, according to The Wall Street Journal (Avantika Chilkoti, December 31, 2018), even outperformed stocks and bonds this year: “Investors who put money into art at the beginning of the year saw an average gain of 10.6% by the end of November, according to Art Market Research’s Art 100 Index, the closest thing the industry has to a benchmark.”

“Contemporary art now is a product more commodified than ever before,” observes Paul Fisher, Director of Art Collection Management for AIG Private Client Group.

How do you navigate and collect in this growing market of investment and commodity? Paul’s advice: Buy what turns you on and go in that direction. And it’s ok to ask for advice.

“Copycat collections get boring, although they may be valuable,” says Fisher. “The best collections have meaning to the collector. Begin with what your collecting interest is and let that be the cornerstone to build your collection. This helps give your collection purpose.”

Commonly that starts with simply buying what you like. “I most often hear collectors from all corners of the country say that they bought what they liked,” he explains.

A person’s focus generally evolves with their collection. “As collectors explore the ‘tributaries’ of the genre of art they collect, collectors shed earlier ‘mistakes,’ swap, and upgrade their art,” says Fisher.

The evolution of a person’s art collection is often just as interesting as the collection itself. “You can see a progression in the art acquisitions of certain collectors,” observes Zinnia Willits, Director of Collections and Operations at the Gibbes Museum of Art. “At first they acquired what was affordable–always looking for quality, even if a piece was small. Then moved on to larger pieces as finances were available, often backtracking to pick up a seemingly less valuable piece by an artist to round out the collection, add depth, and to continue the story.”

This takes some self-awareness and reflection, but it all adds up to make a great collection. “People collect and create an environment around them which is their own identification and interpersonal brand,” adds Fisher.

This is something Willits has noticed too. “I love to see if the person ‘matches’ their collection, and I’m often surprised. Collecting art is a passion project and allows the individual endless means to express themselves freely by what they acquire, which may not be the case in other aspects of their lives.”

As with any passion, learning to express yourself takes some education. “You can’t learn about art or what you like regarding art by reading about it,” advises Fisher. “You should get out and see art. Meet people along the way who are interested in art. Using art advisors to guide you can be helpful.”

He encourages collectors to go to art shows and galleries frequently. He highly recommends going to your local museums and check out all new exhibitions. “I have clients, friends, and colleagues that devote one to two hours a week visiting a museum or other art initiatives,” Fisher says.

This will help set the parameters to build a great collection, no matter the investment reasons.

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Posted in Visual on January 28, 2019 (Winter 2019) by Matt Mill.

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