Art as a Form of Investment

In the past four decades there has been an increase in the number of creative’s. More universities are opening up to degrees that encourage art appreciation and are now offering skills for would be artists in different fields. There are many artists in the Philippines, especially visual artists. In Baguio City and Metro Manila alone, the number of art exhibits occurring is tremendous. However, very little understand how to invest in art, most of the art exhibits become just mere art events for showcase, but information on how to help artists, especially new comers on how to market their work for sustainability purposes is not taught. There is a myth, that if you are an artist, you have no future. It is also a big myth that you cannot invest in art. Some of the biggest investors in the Philippines are putting their money in art. 

How?

One of the best examples is the art event in Makati every year called Art in the Park. A lot of successful traders in the market attend this event, not just for the sole purpose of viewing the artworks, but to find pieces they could hype just like stocks, so that one day it will have a higher value. Art in the Park collaborates with many successful galleries. The galleries have already pre-selected the paintings, of who they think will be the next big hit in the art world and investors like stock market traders get a piece of the action. 

Why?

Purchasing the works of unknown artist, or artist who are just emerging is one way to help the local artist industry. Art is an industry, a form of work that has to be recognized like a medical profession. For without art, who will write new songs that we can listen to? People need creativity the way they need medicine, the way they need food. 

How can your art collection become an investment?

For the past 5 years, investors in the Philippines have increased their eagerness to purchase artworks. There is now what we call passion investments. There are groups that are now initiating art funding, making it easy for investors of all income levels to put their income in art. Such cases have occurred in the United States, as shown by the group The Fine Art Fund Group started by CEO Philip Hoffman. Investors are now considering art as an asset. Investing in artworks is likened to the adventure in the stock market.

Imagine that there are two painting purchased from at art dealer in 1990 for 4,000 pesos each. If the career of the artists takes off, it means if his name becomes big in the art world, then the price of the work could reach up to 20,000 or more depending on how the famous the artist becomes. Ben Cabrera for example, a local artist from Baguio is now one of the best selling artist in the country. His signature alone costs a fortune. If you were able to purchase some of his works back in the 90s, chances are that you can already get a quadruple price for it. Another example of ways to get back your investment is when you buy an art that you love. If you are an art collector, if you simply love the artworks, and you are just fond of reselling some of them in exchange for a return, then you are already rewarded for it.

You need to learn how to have the skill of selecting what kind of artworks you think will have value in the future. You need to know who are the emerging local artists, and support them and buy their works while they are just starting. In this way, you will increase the value of the artworks that you are holding. If you have a painting of an artist that you like, it would be good to collect it, and hype it on social media and with other art collectors in order to increase the value of the artwork, so that it has a higher chance of getting a better resale price. 

Buy paintings if you like them, they might not at first be valuable in 4 to 10 years time, but they can be given to your children or grand children, and who knows they might cost 5 times than their original price. Apart from that, by supporting the local industry, we are strengthening the economy itself, in doing so we affect everything including the stock market. Most of the time artworks are aesthetic investments; you have to be willing to cultivate your love for them. The artworks in it when viewed and seen can provide immediate gratification much more so when they already become valuable in money terms.

Should you venture into art collecting?

If you buy smart, the value of the painting could increase, you need to research on the past winners of art competitions in the Philippines. If they have already won several awards even in local contests then there is a good chance for creating good profit out of the paintings. According to the AMR Art 100 Index, prices have already increased at a compound  yearly growth of 8.0% for art products for the past  25 years. However, art collectors have to realize that you do not need to bid at expensive art auctions just to get worthy paintings for reselling.



Watch out for my next articles where I will be giving you tips and tricks on how to start up in art collecting. I'll also share some insights on how to turn art into something financially rewarding. I'll be conducting interviews with various artists and show samples of their work that might spark your interest. If you have any comments or suggestion, feel free to share your thoughts by using the comment section below.