The changing dynamics of collecting art

For several years, importance of art as a tangible asset was ignored. Unlike other traditional or even alternative investment avenues, it did not receive attention of most market experts. Art as an asset class remained on the periphery largely because it was not as closely analyzed and tracked as most other investment options and even commodities, especially in India.

Of course, wealthy individuals and premier institutions like museums have always been acquiring paintings and other forms of art, largely thought to be beyond the purview of masses. Thankfully, the situation has changed in the last decade or so – both in qualitative and quantitative terms. The art scene has become much more democratic. Furthermore, insight into mechanics of the art market, a more professional approach, an extensive coverage and research to meet the norms of mainstream financial markets has drawn more people to art.

Simultaneously, the art market has become more liquid and transparent in nature. Many parameters, indices as well as auction benchmarks have been created for the purpose of tracking the trajectory, history, provenance and sales trends as a natural response to the growing interest in art. Now, novel analytical frameworks and methodologies are constantly being developed for more dynamic art market research.

Lack of knowledge is no more a hindrance thanks to the Internet and several insightful publications on art. In fact, much is now being talked and written about the international art market, with everything easily available in public domain. Professionals with excellent background and solid expertise in the contemporary art world readily provide a well-informed analysis.

Of course, the key to successful collecting is to work out your approach towards buying or selling art. You may acquire art purely out of passion, enriching your precious collection irrespective of market conditions, or you may want to buy art for diversifying your investment portfolio. Whatever be the motive, it’s essentially a long term process. Being able to buy with a clear focus will turn the simple act of buying art into collecting art. Obviously, much depends on the optimum mix of both quantitative and qualitative research tools coupled with an in-depth knowledge of how the contemporary art markets work.

Then there are issues like documentation and provenance papers, sale deeds, certificates of authenticity, art insurance etc. There are parameters, which serve as the basis for measuring the influence of intangible valuation drivers, such as provenance and irrational premium. All these aspects have made the role of the gallery owners and dealers that much more critical.