People buy art for many reasons. To feel good or to decorate. Or, to make a statement or communicate a need. Also to invest. But how do you know if it really is an investment?
The Investment Case
Most people think of an investment as something you purchase at a lower price, and that increases in value over time, faster than inflation. Art can certainly do that.
Some art matures very quickly, other art takes longer like good food or drink. Sometimes influencers or sponsors can play a big roll. It usually increases in value, as more and more people outbid each other, desiring to have ownership. Whether it’s value will last long will depend on a number of factors: Is it of high quality? Does it encapsulate the feelings of it’s intended audience? Do people respect the artist? Does it have specific or universal appeal? Who are the buyers, and what is their objective?
When to Buy?
It is good to remember that all artists had a beginning. So purchasing when an artist is starting out could mean good returns in the long term. It is the same as with crypto. Those that bought Bitcoin in the “early days” are most definitely smiling now. However, purchasing at any time from an artist with a good reputation is a wise decision.
What to Buy?
When you buy physical art, you get the painting, portrait, sketch or actual piece on it’s medium (paper, canvas, wood, etc). It’s different with digital art. Although it has copyright notices, it is extremely easy to copy. So what do you actually get? An NFT. Yes, a unique key. This is a string of numbers and letters that only you have. Your NFT key must be in your digital wallet for you to prove ownership.
Should You Sell?
That depends entirely on you. If you do, you will transfer the NFT key to the new owner’s digital wallet, after payment. This transaction will be imbedded as proof in the blockchain you use.
Investment Conclusion
Art can be a great investment if the above advice is adhered to. Be cautious, but not so much that you pass up a good opportunity!