With so many investors looking toward stocks and ETFs, it seems as though people have forgotten about the art market. The reality is that, although fine art has slightly fallen out of favor relative to other investments, the art world continues to bloom.

With that said, you'll be able to find plenty of alternative investments if you know where to look. And the world of fine art is one asset class worth taking a second look at. Investing in art differs from traditional investment methods; it tends to be a very long-term investment strategy with plenty of risk and intangible factors difficult to predict.

For art, like most investments, the rarer it is and more in-demand, the more expensive it becomes. Sounds easy right?

Well, creating wealth through art isn't easy or guaranteed. You'll need to do plenty of research on the various art forms, paintings, sculptures, or whatever else in order to verify their authenticity.

But, if you get it right, there is a huge amount of upside potential! The fine art space is making a huge resurgence, especially with the appearance of art NFTs (not something we will talk about here). More and more auction house records are being broken with unfathomable bids and this trend is expected to continue in the near future.

Here are a couple of tips that should help you get started with investing in art and turning a profit.

‍

The Investment Choices of the Art Market

These tips are common steps that art investors take to divide the originals from the copies. After all, you don't want to invest in art that turns out to be a cheap copy that you won't be able to sell for a meaningful amount of money.

‍

Original Paintings and Giclées

First off, you might be confused with the term giclée. In short, giclées are machine-made copies of original artwork, usually printed on fine paper or a canvas. They can look just as good but investment-wise - they may not be worth it.

Copies may look gorgeous and you may even want to put them on your wall, but they'll never reach the auction prices of the originals. Simply put, the original artwork was created by the artist themself, taking time and effort. Being in the presence of original art can make many connoisseurs feel as if they are with the artist during the time of creation.

Originals also aren't limited to being singular; the Mona Lisa may be unique and the only original Mona Lisa of Leonardo Da Vinci, but other artists may have painted multiple same paintings. The same rule applies - the rarer it is, the more it's worth.

Giclées, on the other hand, may be perfect reconstructions of the original, but they usually come at a fraction of the price and aren't as valued. You could still earn some money from this art investment but you could also lose lots of money, so be careful what you are buying. It's difficult to tell.

If you want to give giclées a chance, you'll be happy to know that countless museums offer giclées of masterpiece fine art but - don't expect a good investment from them. As an asset class, they belong in the lower group thanks to their status as copies.

‍

Posters and Prints

Various historical periods throughout history featured prints and posters in the art market. You didn't have to buy art as an investment; they just looked nice on walls. Usually, these posters and prints featured fine art and original artwork, but they differ from giclées.

For one, they came in various forms and not just fine paper and canvas. Instead, they could be made into lithographs, hand-pulled silkscreen, and block prints. The assigned value to posters and prints doesn't come from the type of art they feature but from their rarity.

Limited edition prints can be great art investments as their value is much higher than regular ones. Interestingly, there are price discrepancies within these as well; print number 2 is typically more valuable than print number 52, out of 100, for example.

Cultural significance also plays a role in influencing the value of these prints. So, if you want to improve your investment portfolio and sell artworks - posters and prints could be the way to go.

However, it might take a while until your personal investment turns a profit.

Lastly, the value of this type of fine art is also influenced by the edition's size. Larger prints have a very fair market value and they can turn into a fine investment. On top of that, prints that have been signed by living artists are even more valuable.

These are just the major factors that contribute to print value. As an asset class, they are profitable and generally lack the risk that comes with other physical asset types. However, if you want to buy art like this, you might have to set aside a hefty budget.

‍

Art Auctions on Cruises

You heard that right! Art investors often visit cruise ships that host art auctions. Art lovers and investors often visit these auction cruises due to their uniqueness and easy access to valuable art.

Sometimes, even new artists are showcased and the art prices range from very affordable to completely out of reach. Nonetheless, due to the sheer number of art professionals and other collectors, you'll easily be able to make connections that should prove helpful for buying art.

Visiting one, you may want to buy artwork of a renowned artist in the hopes of selling it further down the line for profit. The artwork may be completely authentic, beautiful, and fairly affordable - but this doesn't mean buying it will be a good idea.

First thing's first - the artwork at these cruise auctions and art galleries changes on a daily basis because most of it gets sold in one day. The appraisal is high and most artwork is offered at just a fraction of the expected value.

Unfortunately, your financial future might be short-lived were you to fall into such a trap. The thing is, the auction houses' main goal is to make a profit. Sure, they're offering authentic art at discounted prices but - they bank on your lack of knowledge of the fine art market.

See, your piece might be valuable, but if it isn't rare, well-respected, and ultimately sought after, you won't be able to sell it. Thus, unless you plan on placing the art on your wall, it wouldn't be a good investment.

‍

Selling Art Investments

Here's the deal with the fine art market. Prices are not only dictated by an art piece's characteristics but also by the owners themselves. A large majority of sold art is never resold, meaning the prices can get skewed fairly easily.

The owner auctions the piece at a price they deem worthy. In most cases, these prices are slightly higher than expected because the owner either thinks they're worth more or simply wants to make a nice profit.

In-person auctions are the best choice if you want to sell an art piece. They attract the most investors and you could get a nice price for them. Keep in mind that if you want to sell art through a fine art auction house, they'll keep some of the profits (usually from 5% to 25%).

If you want to take your chances with an online marketplace then our advice is not to. Not only do they draw in fewer customers, but the art sells for less. So, if you want to start investing in art, it's best to do it through auctions.

‍

Final Words

The fine art market requires quite a lot of knowledge and experience with various artists and their art. Good art takes a keen eye to notice its value and, without it, you risk making your art investment worthless or at least not profitable.

Comparing the art market with the stock market may not be worthwhile, but if there is one thing that both the stock market and the art market have in common, it's volatility and a certain dose of chaos.

The good news is that you can have a great time buying art from contemporary artists, especially those that are just breaking into the art world. Their art may be interesting to art collectors who are looking to purchase art. That's where you come in.

Your success with art buying and investing depends on your ability to determine the artwork's value. If you invest in art smartly, you'll be able to make a nice profit, especially in the long run.

Lastly, an art advisor might be a good choice if you're confused by the whole ordeal. Art fairs are no joke and you need to be decisive about what to do so make sure to come prepared.

Good luck and remember - don't put all your eggs in one basket!

‍