Thursday, June 20, 2013

Need to diversify portfolio and basics of gathering art

Art has emerged as a valuable asset a large majority of people would love to possess, if they could afford it. Most of these people have started buying art because many wealth managers ask them to diversify their investment into it. For HNIs, looking to diversify their portfolio across different asset classes, it’s another lucrative avenue they can explore! Of course, there are eclectic buyers, who like and enjoy art, and hence buy it.

A news report (‘The buying game’ by Rachel Spence In The Financial Times, UK) had mentioned: “Although India's art market has come off the dizzy heights that it reached a few years ago, when a rash of art funds caused frenzied speculation, its still-booming national economy has made sure that a vast untapped source of new for modern and contemporary art still exists.

"Yet the lack of state-run infrastructure has left the art sector dependent on the initiative of private collectors like the Poddars of the Devi Art Foundation, who often put their works on public display.” Though younger artists like Subodh Gupta have grabbed headlines internationally, contemporary Indian art is still struggling to come out of the shadow of India’s more famed modernist painters like Husain and Souza.

Swapan Seth, whose own collection ranges from the late US photographer Herb Ritts to the poetic Indian artist Atul Dodiya thinks it’s better for those new to the domain o be guided by other experienced collectors rather than gallerists. This is necessary to prevent a tendency of short-sighted acquisitiveness, by no means an Indian prerogative.

This is important because financial advisors now ask their clients to consider investment in art for they believe it has good scope for capital appreciation. They generally advise not to put around not more than 10 to 15 percent of their total portfolio in art. Ideally, approach experts when it comes to investing in art, they suggest. This is because a crosscheck on authenticity of the work demands a high degree of knowledge and expertise. It is also advisable to check the artist’s track record and also the history of the work before buying it.

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