Art Collecting: Breaking down the basics

Art collecting is for many people an obsession and it’s easy to see why. An art collection can be intensely personal and reveal so much about a person, as Kevin Melchionne explains in his discussion on Collecting as an Art, the careful curation of images can illuminate the “aesthetic attitude of the collector [and] what the collector wants to show us about [their] aesthetic perception of the world”. Collecting is not just about conspicuous consumption but rather “creating a class … who’s meaning resides in the way the pieces in the collection call attention to one another”. Here Melchionne is arguing that collections are not simply a group of static images but a series of pictures all in dialogue with one another – telling a larger story.

We see this meticulous selection and organisation most clearly in the John Soane museum. Formerly the home of the famous neo-classical architect, Soane’s Museum nestled in the heart of London’s Holborn district has been preserved today exactly as Soane left it per his explicit instruction.

The collection of some 40,000 paintings, sculptures and artifacts were all arranged to embody the aesthetic values of the Picturesque movement, incorporating texture, perspective and light to create a dynamic space that offers a unique sensory experience for the viewer. While not every collector is as fastidious as Sloane, his attention to detail shows that for some collecting is just as much a creative enterprise as any other artistic discipline.

So, now that we’ve established why collecting is so important we can begin to think about how to start a collection of our own. Before going out and buying the first thing you see it’s important to know what kind of art you are interested in. Personally, I’ve always been drawn to 19th Century Orientalist genre painting with its colourful depictions of Moorish architecture and winding, narrow side streets.

Everyone will instinctively gravitate towards different kinds of styles so consume as much art as you can. Understandably, given the continued disruption caused by the global pandemic not everyone has been able to attend international biennales and art shows but some fairs like Art Basel have risen to the challenge and created virtual viewing rooms for prospective buyers to appreciate works from the comfort of their own home.

The next question that comes to mind for any would-be collector is just how expensive is art? The answer is it varies, art can be expensive though there are definitely ways of picking up pieces at more affordable prices.

If you’re a fresh-faced beginner auctions are always a good place to start. Traditionally, buyers tend to visit brick and mortar venues to view pieces of interest in-person but more recently there has been a movement towards online auctions, this transition has only been accelerated by the pandemic. Online sales continued to rise in 2021 increasing by 178% when compared to the same period in 2020. While the innovations of the digital age have transformed the infrastructure of the art market by improving accessibility it remains important to buy from reputable institutions, stick to trusted auction houses or galleries and steer clear of online platforms like eBay.

Before buying at auction be sure to comb through auction catalogues and make a note of any pieces that catch your eye. Be wary of pictures that are listed as “attributed to [artist’s name] or “a follower of [artist’s name]”. Most of the time these suspicions are baseless and lack any real evidence to establish a compelling provenance so unless you’re prepared to do the research yourself don’t be swayed by the possibility that it *could* be a work by a popular artist.

If you spot a painting that catches your eye take the time to research the artist. Websites like Artnet, Invaluable, Artprice and Mutual Art are indispensable resources and their indices track the performance of an artist from previous auctions, this will give you a much clearer picture of how much you should realistically pay. The only issue is that access to these online databases come at a price, generally information on an artists’ index is hidden behind a paywall. I would recommend that if you are serious about buying art you should invest in a subscription. A basic monthly subscription to a site like Invaluable will set you back £30.00 a month (as of Jan 2022) and will also give you special access to exclusive auction catalogues for upcoming auctions as well as tailored notifications. It’s also important to factor-in auction house fees and any additional costs (e.g transportation, import tax etc.) before deciding what you are comfortable bidding. Once you have settled on an amount you are happy to pay – stick to it! Don’t get carried away by the adrenaline of the auction and bid beyond your means.

Galleries are among the most reliable ways of purchasing art because they either work directly with the artist or sell works on the secondary market after authenticating works. The role of the gallery is not to simply exhibit works but to raise the profile of its artists at biennales and fairs. This of course comes at a premium, works bought from a reputable gallery will often be more expensive than those sold at auction, according to ArtPrice’s Definitive Guide to Art Collecting 101 the traditional contract between artist and gallery provides a 50% mark-up on the artworks price to compensate the gallery for its services. But don’t despair, it’s always worth contacting the gallery to ask whether the price is negotiable or if they offer payment plans. Establishing a relationship with a trusted gallerist is the best approach in the long term. Once a gallery is familiar with a clients’ taste and sensibilities they may even recommend pieces to them in the future.

So, here’s the part where I completely contradict some of the advice I’ve already given. I have bought pieces from online sites like eBay in the past. In doing this, you are taking a huge risk and will often spend a considerable amount of time scrolling through pages of endless search results before finding anything of interest. But in saying that I have had some moderate success. I once purchased a painting from an eBay seller which still had its original auction labels attached from Sotheby’s and Bonhams. I then contacted the auction houses to confirm the painting had in fact been sold by them and to learn more about the item from their archived catalogues. This is probably one of the best indicators of quality as the painting has already passed inspection from some of the most reputable auction houses in the world.

Additionally, if you do decide to take a chance on a painting from eBay I recommend contacting the seller directly and asking for any additional information on how it came into their possession, how long they’ve owned it and whether there is any paperwork to authenticate the picture. This should give you a better idea of the painting’s history. I also stress the importance of thoroughly checking a paintings condition before purchasing it over the internet. Restoration is an expensive and time-consuming process that should not be taken lightly. Sometimes, Fine Art galleries might also have an eBay store where they sell their works that are of a lesser quality but still valuable. This way you know you’re getting something of substance at a more affordable price. Ultimately, sites like eBay can have their advantages. If you take the time to scroll through the listings you can find some incredibly rare, one-off pieces.

While I would certainly argue art is a worthwhile investment it should be noted that unlike most other asset classes it is far riskier. This is why I would reiterate the importance of buying art for its enjoyment and not any monetary incentive. Art is wildly unpredictable, even so-called ‘blue chip’ artists can suffer a sudden decline in their market value. For instance, the YBA’s (Young British Artists) shining star Damien Hirst (b. 1965) has seemingly fallen out of favour with some collectors in recent years. Hirst’s’ piece Lullaby Winter (2002) belonging to a series of seasonal works initially sold in London for £9.7m ($14.3m) surpassing its estimate £3-4m and setting a new auction record as the artist’s sculptural works. However, the piece was later returned to market and sold by private treaty for $4.1m in 2015 representing a sharp decline in his value. While Hirst has continued to generate buzz in the art world, his rise and fall are a testament to the volatility of the art market, prices regularly fluctuate and tastes change.

Of course, it is possible to turn a profit on art but it’s a far less secure investment than stocks and shares because it “defies financial logic”. For this reason, art often confounds investors who find it difficult to appraise works when they “disregards the traditional benchmarks of financial analysis”. Art is a slow game and you will likely be holding onto your piece for a long time before reaping any rewards. Attempts to ‘gain’ the art market and turn a profit have been met with criticism from some, Gallery owner Guy Peppiatt has argued that this kind of financial strategizing totally overlooks arts “aesthetic beauty” which “[should] be admired in one’s private collection or in a museum” (Peppiatt, 2007). Regardless, despite its associated risks art has become an increasingly attractive investment opportunity for those looking to diversify their financial portfolios. Giampiero Favato argues that the reasons for this are twofold.

Firstly, art has an “absolutely limited supply” and secondly “it has the ability to survive the economic downturn”. The first point is pretty obvious, art is a heterogenous asset and its intrinsic value is a consequence of its limited supply. An artist’s output is carefully controlled to prevent their own market value from depreciating. The case of Italian neo-expressionist painter Sandro Chia best illustrates this point, at one time he had been the dazzling protégé of art mogul Charles Saatchi until Saatchi disposed of all his works at once following a rumoured spat between the two, the sudden oversaturation of Chia’s paintings on the market irreparably damaged his reputation. This is why even official prints from the artist’s studio are only produced in a limited number to maintain a degree of scarcity.

The second point Favato raises is perhaps less obvious. One might assume that during periods of economic decline the art market experiences similar convulsions as people have less disposable income to spend on luxury goods, however art has proved surprisingly resilient. For instance, in February of 2009, shortly after the collapse of Lehman Brothers, Yves Saint Laurent’s personal collection of art sold for a record breaking $483.8 million. There is some speculation that this is because the art market lags around 6-18 months behind equity markets but perhaps the explanation lies in the buyer’s demographic. In an article by Wealth Management journalist for Forbes, Ollie A Williams noted the staggering buying power of HNI (High Net-Worth Individuals) millennials in recent years with the average spend in the first half of 2021 reaching $242,000, this represents an increase of 42% on the previous year. Furthermore, a 2021 report published by UBS in association with Art Basel found that 57% of the HNI collectors had plans to purchase more artwork in the immediate future. What does all this mean? Well essentially a new generation of passionate art collectors has come-of-age and many of them are now secure enough in their own finances to begin their own collections.

Mia Warren

Vice President

Cambridge University Fashion & Luxury Business Society