The Challenges and Benefits of Contemporary Art Investment

Benefits of Contemporary Art Investment - Contemporary Art
Source: Borro

Before examining the challenges and benefits of Contemporary Art investment, it is important to pinpoint where in the art landscape this category falls. Auction houses and galleries split what the un-initiated might call ‘Modern art’ into three main periods: Impressionist, Modern and Contemporary Art. Impressionist art begins around 1880 and would include any artist working under that banner, with no fixed end date. This is more of a stylistic distinction than a temporal one.  Modern Art broadly covers artwork from 1880 to 1945, though once again, this is a stylistic distinction.  A Picasso painting from the mid-sixties, for example would be sold in a Modern Art sale, rather than a Contemporary art sale; as he produced most of his work in this period, he is a Modern Artist.

Defining Contemporary Art

The category of Contemporary Art is a large and all-encompassing one.  The Contemporary period begins roughly at the end of the Second World War and centres around New York.  The Second World War forced many artists and wealthy collectors to flee from the conflict, and gradually after the War it became undeniable that New York had become the epicentre of the art world.  There is no fixed date for this shift and it was a gradual one.  To further complicate matters auction houses often sell work in Post War and Contemporary sales, to reflect the fact that some of the work produced in the period immediately after the war, was stylistically more akin to Modern Art, than contemporary.

Benefits of Contemporary Art Investment - Modern Art
Source: Borro

Investment Value of Modern Art

The supply of Modern Art is very limited, as the artists sold in these sales have generally died.  After an artist’s death, there is almost always an upsurge in their prices, as the volume of their work cannot increase significantly: though new works are often discovered in this period, due to the increase in price.  This increase is in part because there is very little that can affect the reputation of a dead artist enough to alter their market value. This works as a double-edged sword for the investor; while a work by Van Gogh will never really decrease in value: unless the attribution is wrong, it is unlikely to leap in value in a short time.

What Causes Contemporary Art to Increase in Value?

Benefits of Contemporary Art Investment - Richard Prince
Source: The Met

Occasionally those who invest in Contemporary Art can find their works rocketing in value over night.

One of the artists whose work has shot up in value in recent times is Richard Prince.  Prince’s work is driven by the visual imagery of consumerist America.  His works include his cowboy series: reworkings of cigarette advertisements that have seeped into the subconscious of the American public, reproduced simply on a large scale without the text.  Prince is also known for joke paintings, where he has painted one liners simply and his series of nurse paintings.

The nurse paintings are a series of paintings based on the covers of cheap pulp novels.  Prince scans the images, screen prints them and then paints over them.  In 2003, this series was first shown at the Barbara Gladstone Gallery in New York and you could buy a painting for $50-60,000.  At this time, Prince was a well-established mid-career artist, but he hadn’t hit the big time.  By November 2007, a painting in the series sold at Christie’s New York for a staggering $6,089,000 – a hundred times as much as you would have paid for it in 2003.  And though prices have fluctuated, these works have consistently achieved between $5-7,000,00 from the mid 2000’s until now. You would be hard pushed to find any way of achieving such a return in such a short time anywhere on the planet, especially if you want to remain on the right side of the law.

The Risk of Contemporary Art Investment

On the other hand, it is possible to lose a great deal of money on an art investment in an equally short amount of time.  The art and advertising mogul Charles Saatchi, was one of the first to buy the work of the so called Young British Artists or YBA, most notably Damien Hirst.  Saatchi also bought all the work of an Italian Contemporary Artist named Sandro Chia, that he could lay his hands on, vastly inflating prices.  Then, a short while later, he decided to sell it all, flooding the market and causing Chia’s prices to plummet overnight.

Those who jumped on the Chia bandwagon, buying his work as it was the next big thing, will have lost money.  Those who bought work earlier, because they liked it and it interests them are likely to have fared better, as though prices of Chia’ s work have never reached the peak they rose to while Saatchi was buying them up, they have returned to a reasonable level.
Some have accused Saatchi of deliberately flooding the market, something he has strongly denied: after all, what would he gain by devaluing his own holdings?  It would be naive to suggest that he does not regard his art collection as a valuable asset, yet it clearly means more than just numbers on a balance sheet.  Saatchi has often installed his newest purchases in his home, so he can spend time with them.  In 1997, when the Royal Academy of Art in London showed his collection of YBA works in the now seminal Sensations show, he spent several days obsessively overseeing the installation of the works.  In the case of Sandro Chia, Saatchi had most likely done what he had always done; buying art that interested him and then selling it, when it ceased to.
Intangible Benefits of Contemporary Art Investment

Benefits of Contemporary Art Investment - Charles Saatchi
Source: Daily Mail UK

Ironically Saatchi, who has been criticised by some for manipulating the art market for his own financial gain, offers us a clear picture of the benefits of investing in Contemporary Art, beyond the financial.  It is possible for those of us even of much more modest means, to interact with Contemporary Art in a much more immediate and intimate way, than work produced in other older periods. By following new exhibitions and changes in the style and output of an artist or group of artists, one can feel much more involved with the work.  In some instances, you may even be able to meet the artists themselves, and discuss the work; something it would be impossible to say about most Modern artists.

It is this relationship with the art and the artist, and the ability to be surprised by Contemporary Art that is so exciting. Contemporary Art also deals with the concerns and challenges we face daily, as after all Contemporary Art is literally art produced by our contemporaries; those who live in the same times that we do. Buying into this, the benefits of Contemporary Art can mean so much more than money; an investment of time, thought and feeling that ultimately can return so much more.

Do you have a Contemporary Art collection that you’re looking to maximise the value of? Submit an enquiry online or call 0808 163 9537 to discuss your options.

About the Author

Huw is an experienced art storage and shipping professional with an art history background.

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