The success of an Art Funds is absolutely dependent on the resale value of the artwork. Thus, the management of an Art Fund must see a "deal" meaning the work is being sold for less than it's worth or that it could increase in value over time. Possible problems in accumulating art could be overestimation in an artworks value or lack of demand or appeal for the artwork. Thus, it is important for the fund to consider holding onto the piece until the demand increases. Because Art Funds turn the art market into an industrialized market, there is little to no appreciation for uniqueness or outlandish art, but only for art that will have commercial success. In my fund I would accumulate art that would have commercial success but I would also invest in more obscure art that would not necessarily have a wide appeal but would be appreciated by more daring buyers.
As prices are generally hard to predict and are subject to buyer's preferences, this makes resale value difficult to ensure. Therefore it is important to invest in up and coming artists where the seller is able to name a price without being subject to the comparison of other works that have been sold. I would consider that the value of art depends on its uniqueness and scarcity. In order to create a stable, viable and successful art investment portfolio I would consider the following strategies:
- Accumulating diversity in mediums, genre and notoriety of the artists. If my fund were to focus exclusively on contemporary art or old masters I would be limiting the collection's worth.
- By creative a diverse collection of artwork including art from many movements, I could maximize the value of the collection by appealing to many different audiences and being involved in many areas of the art market.
- Diversity in notoriety of artists is also important in establishing a successful art fund. It is important to have very famous and well known works but also important for the fund to invest in up and coming artists.
- In particular I would invest in old masters that are fairly limited in quantity and can no longer be produced. Specifically, I would invest in Rembrandt's work because he is an extremely brilliant artist who has worldwide appeal. In addition to his global recognition I believe Rembrandt's work will increase in value over the next couple years as enormous amounts of money are being spent towards attributing and de-attributing his paintings. In particular, new technology has allowed the University of Amsterdam and the Rembrandt Research Project to re-attribute paintings that were previously thought to be paintings done by Rembrandt's pupils. In addition, the Rembrandt Research project has de-attributed paintings hanging in both the Hermitage Museum in St. Petersburg and the Metropolitan Museum of Art in New which are now being called "School of Rembrandt." In one particular case a private investor purchased a painting called Old Man with A Beard for $40,000 in 1998 which was sold as a work done by one of Rembrandt's pupils. The Rembrandt was later re-attributed thanks to x-ray technology and a particle-accelerator as two paintings were found underneath. This painting is now worth $13 million US dollars in 2011.
- I would steer away from investing in Koons & Hirst as I think the appeal of their work is a fad and I believe the mass production of their artwork and prints will cause them to devalue over time.
- I will consider that contemporary art is at the forefront of the art market today and it is important to invest in what the public is interested in.
- I would invest in up and coming artists such as Jasmina Danowski whose paintings are very colourful and abstract. She is also a good candidate for investment as she uses both water-colour and oil. Artists that use different mediums are crucial as certain buyers may prefer one medium or another. Again, when searching for an up and coming artist it is important to consider how commercially successful the artists will be. I would choose Danowski as I believe she appeals to a wide audience and thus will have a huge resale value. It is important to invest in very "safe" artists that appeal to a wide audience and also to invest in perhaps one or two obscure artists who may not have as a commercial appeal but who create very special and unusual pieces.
- I would invest in a more obscure up and coming artist like Pasquale Cupari. His pieces are very unusual and he mixes many different mediums. I cannot see his paintings being very commercially successful but I think there are buyers who would appreciate and believe in the bizarre pieces he creates
- It is through the exposure of the new up and coming artists the fund will endorse that will generate the largest profit. If the fund hangs onto all it's investments, the demand for each artist will likely increase after much promotion is done.
- I would also donate portions of the funds portfolio to a museum or other public foundation. This would expose the fund to a larger audience and make the public more aware of the type of works in the fund.
A Living Sound II by Jasmina Danowski. Ink and gesso on paper (60X 40 inches).
This painting is a good size and I believe it has huge resale value as I think it could appeal to many experienced buyers and buyers who are just starting their art collections.
Paparina by Pasquale Cupari. Oil, Enamel and mixed media on Canvas.
I believe this work is a little more obscure and will have less commercial appeal but will have have resale value to certain buyers.
Links to the very interesting Rembrandt reattributing stories:
