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Investment Tips
In the global financial turmoil, art has been seen as an asset diversifier. If you bought a Picasso or a Van Gogh painting three years ago, some experts believe it could now bring your more return on your investment compared to the stock and real estate markets.
As the economy booms, Chinese, specifically the young with high disposable incomes, have shown more interest in art and become more discerning with art pieces and are turning to the experts for answers.
Art Lover
“In time, there is hope that the market will adjust so that the buyers can purchase fairly priced pieces rather than see the overpriced artworks.”
A: We talked a little bit about this has been an investment, kind of like real estate or buying bonds. Especially the Chinese contemporary art market, it’s really different. As you said, it is very hot recently. We all know banks aren’t necessarily doing well across the world. So maybe art is a good place to put your money these days.
K: Some people say art it’s some kind of investment, but I would say it’s not for short term, at least in five years or ten years. When we talk about the property or stock, you can buy and sell. It’s so transparent. You can sell it, but you can re-buy back again, but for the art work, for example, very good famous artist, if his work is created at the best period, for example, 1990 to 1993, maybe they bought ten pieces. One collector bought them and maybe keeps permanently, or institution museum bought. So that means it’s getting less and rarer. If now you use good prices to buy a piece of art work with history, I would say the price will definitely jump crazy when the time comes coz you never can find them again.
A: Any suggestions for people as they are looking to buy art? Maybe they weren’t doing that before and they’re kind of new to it.
K: As I say, it really depends on how much money you want to put in to buy. If you want to buy and try, then I would say it’s true. Now look at the upcoming artist, at this moment now I wouldn’t say Chinese contemporary art. I’m really the one coz there are so many artists and the prices still wait for the adjustment. Maybe you should look at the Japanese, young artists. So I think their prices still tend to be low and their quality is pretty good.
A: Is it a good time for emerging artists or is it a little bit more dangerous maybe collectors and investors are going to stick to something they know a little bit better?
K: Everybody predicts within these few years, the market is like M-shape, either to go very exclusive famous master painting or to go to those so-called upcoming young artists. I have the other opinion. When you said about the young artist, probably because the price is cheap, we are talking about 50,000 to 200,000. But if you have more money, I would look at all the top 20 Chinese contemporary artists and focus on the period of 1990 to 1996 coz that’s the best period in the Chinese contemporary art. Those are the history. They never will paint back those things again. Even they paint; they lose those old time spirit. For me, I will look for these more established, establish in the sense of artistic creation, but not yet establishing in the art price yet.
A: When you look at a piece of art and say it’s not one of the biggest names. It’s not necessarily an up-comer. How do you know you are getting a good price for a piece of art?
K: I wouldn’t say you can easily spot a good artist, basically first when we talk about the Chinese contemporary art, I think we’d better read a lot. First you study the American contemporary and German expressionism, because you have to see most of the Chinese contemporary art are influenced with these two previous groups. So if you are familiar with those two histories, when you go to the art studio and look at the work, you would say ‘ah, that’s not the copy’. So you got something, you got your own identity, your own signature, your own style. So first we have to find somebody who has a very unique style and also concept, whether the creation has a new concept. So when I am looking whether so-called creation medium has something new. I mean its language is just like writing, whether you have your new way or new idea. So I’m looking at these three areas. I would say 90% I know whether they would be a potential good artists.
A: It seems about ten years ago, it was mostly the elite who were buying especially the Chinese contemporary art. Are you seeing more people appreciating that type of art and getting involved in buying?
K: Oh, yes. 2008, I have met a lot of people who want to buy the art. And they went to Christie and Sotheby. Wow, my goodness. You need to spend so much money for one piece of art. It’s true. In the last 2 years, I do see a lot of real keen collectors and serious art lovers. They want to buy. But then they feel the price is too high. They wait until the good time now. There are a lot of new buyers waiting. I would say get a consultant first.
A: And then do you go with that consultant coz like you said, there is a good chance that you are going to have different view points with the consultant and yourself?
K: Yes, normally when we say, for example, when we talk about the Asia contemporary art, it’s like a portfolio. If you identify how much money you put in, then you have to come up and say. I think the consultant will work without you like the portfolio, 60% for the Chinese contemporary and 40% for the Japanese or another 20% for the Asian modern. So basically we always have different status. Some even say I prefer 50% on the traditional ink paper. That’s fine, but first identifies which direction you want to go, which category you want to invest.
A: Do you think of the exhibits now because of the financial market or artists still trying to plug away and really turn out some new pieces?
K: I guess these 2 years, there will be fewer exhibitions. It’s difficult to find sponsor, even for the institute like museum. So it always need sponsor for some good exhibitions. It’s true. It will come down a little bit. I think it’s a good period for the artist. They have fewer visitors, less exhibitions and they can focus better their energy and time to the creation.
A: Does that give the emerging artists a better shot against some of the ones who are commanding the top dollar?
K: Yes, I think so.
A: Hopefully, people start investing in more some of the newer ones. That even out a lot of the prices I would imagine.
K: I think not with the first quarter. We have to wait a little bit coz this time the crisis is not only the money you lose. Not everybody loses money. Somebody can make some money. It’s about what’s the future outlook and about banking system and how the economy will turn. All the things, people still don’t know exactly. We’re still living in like a fog.
While the financial crisis will likely continue to lower the volume of Chinese art transactions into the spring auction season, many experts believe this change is a healthy balance to the overnight fame and wealth thrown into the Chinese art market in the last decade. Investors previously play in the financial markets and real estate may now find their money to be safer being put to use in the auction house.