Debunking Top 3 Myths on Art Collecting
According to the Art Basel x UBS Art Market Report 2022, Dr. Clare McAndrew estimated that $65.1 billion was generated from the global art market last year, which signaled a strong recovery from the pandemic (access the full report here).
Dr. McAndrew also reported that collectors spent an average of $275,000 on art in 2021 compared to $126,000 in 2020 and $72,000 in 2019, another indicator that the market is holding up strongly.
As we're getting closer to one of the most significant art fair events next week, below are the key factors for some collectors to spend 6-figures or high 7-figures on an artwork:
Intellectual stimulation: personal interest and learning
Philanthropic mission: support the artists and culture
Investments as another form of asset
Social prestige/status
Brand and institutional awareness and amplification
Below are the top 3 misconceptions and ways to create and expand your art collection.
MYTH: YOU HAVE TO BE ULTRA-WEALTHY TO COLLECT ART.
Fact: Don't let the big numbers from the market reports scare you. This myth is one of the top misconceptions about collecting art. Although some significant art collectors have the most coveted artworks worth millions of dollars, you don't need to be a billionaire to acquire good artwork. Many seemingly lucky art collectors purchased the works when the artists started their careers, and the value of these works appreciated over time. For instance, Herb and Dorothy Vogel amassed works on paper and small paintings by many artists in the 1960s on a modest income. Herb was a postal worker, and Dorothy was a librarian, and they've managed to collect and store thousands of artworks in their one-bedroom apartment on the Upper East Side of NYC. Their collection was worth millions if they sold them, but they've decided to donate 2,500 works from the 1960s to the National Gallery of Art.
In addition, many collectors, such as The Vogels, purchase the artworks because they love them and the artists they support. Nowadays, there are plenty of opportunities to buy art with diverse price ranges from online platforms and art fairs. To get more tips on collecting on a budget, Dorothy gives some insights here.
Earlier last month, I attended a private reception at a major financial institution in NYC to view their extraordinary art collection. The institution intentionally does not publicize its collection externally and treats its artworks like collections in the art museum (so out of respect for the institution's privacy, I will not disclose its name here). In addition, the institution supported emerging artists and emphasized the acquisition dates on their labels to reinforce their support for these artists before they gained fame and recognition. Finally, big corporations often commission artists to create large-scale artworks to make the work environment friendlier and more approachable to their employees, clients, and the public.
MYTH: EXPENSIVE ART IS BETTER ART.
Fact: Not all works by the same artist are valued equally. Various factors determine the value of the art, such as its provenance, condition, exhibition history, and historical relevance (see more here). One wise collector said, "Rarity is common; quality is rare."
The concept of rarity or 1/1 has been overly played and often misunderstood, especially in the Web3 marketplace. "Rarity" in the art market implies finite quantity and thus drives the value when demand is high. No two paintings by the same are alike when dealing with physical artworks, especially paintings. Each piece has unique characteristics and history and takes a certain amount of time or materials to produce during the artist's lifetime.
Of course, the emergence of NFTs changed the way we perceive value. For instance, it has demonstrated replicable artworks, such as digital art, can produce significant value. Calling an artwork rare without quality and substance is just an ordinary artwork.
A true rarity goes beyond its originality and unique traits--it's about mastery of techniques and skills, intentionality, and creating emotional, cultural, and social impact.
So what determines the value of art? Read more on "What makes Art Valuable? 3 Ways to Raise Your Creative Value as an Artist."
Like the Vogels have demonstrated, there are plenty of other high-quality types of artworks, such as print editions, sketches, and drawings are fractional of the price of the large-scale paintings by the specific artist.
MYTH: YOU NEED A FORMAL ART EDUCATION TO UNDERSTAND ART.
Fact: Although helpful, you don't need formal education in art history and studio art to understand art. As with other skill sets, developing an eye for good art can be learned. Many notable collectors today and in the past come from industries outside of art. They commit their spare time to read historical art texts, seeing exhibitions, and speaking with artists and professionals to learn about art and develop their sense of collecting style.
One prominent art collector advised me not to be intimidated to visit galleries and ask questions. If the gallery staff is reluctant to answer your questions, then walk away; it's their job to educate and inform the public about the work on display. If you find more welcoming galleries, then always ask to see other mediums by the artist (these are usually stashed in the viewing room)
Overall, art collecting is a joyful experience, not a stressful or overwhelming one. Although art is a form of financial asset, this shouldn't be the primary motivator to invest in art and artist. Contrary to common belief, seasoned art collectors spent more time than money to build their legendary collections. Although it takes enormous capital to fund an art collection, much more time has been invested in cultivating thoughtful collections and meaningful relationships. Lastly, an art collection evolves; it is a journey, not a destination.
(Disclaimer: All ideas and commentaries presented in this post are for information only. These are not legal, medical, or financial advice.)