Investing in PH art? 5 things to know before you buy
MANILA, Philippines - Filipino artist Ronald Ventura set a milestone record in 2011 when his painting, "Grayground,” sold for $1.1 million at Sotheby’s Modern and Contemporary Southeast Asian Paintings auction in Hong Kong.
The momentous sale of the almost four-meter long graphite, oil, and acrylic on canvas piece not only brought international attention to Philippine art, it also made the idea of investing in it a most attractive proposition.
In recent years, more and more Filipinos have been buying art not just for decorative purposes, but also in the hope that it will increase in value through the years.
Richie Lerma, advisor of Salcedo Auctions, says, “Yes, it is certainly growing in popularity as the new affluent as well as more established individuals are looking at alternative asset classes to diversify their portfolios.”
Art buyers range from young professionals and senior executives to business owners and retirees, says Lerma. Art investors aged 25 to 35 years old are predominantly male. Those above 35 years are usually married, and the decision to acquire art pieces becomes a joint undertaking by spouses.
Contrary to popular belief, one can start investing in art with as low as P10,000, Lerma says. But you must be wise enough to spot a winning investment.
To make your foray into Philippine art financially worthwhile, here are five things to consider:
1. Buy art that you genuinely like.
Does it speak out to you? Most experts agree that you should acquire a work of art primarily because it brings you pleasure. Making a profit out of it should only be a secondary motive. Remember that a work of art is not liquid; you may have to wait for a very long time before you can dispose of it, so make sure it is something that you would be happy to keep at home.
2. Do your homework.
Visit museums or attend art lectures organized by credible institutions to learn more about what it is that you are buying. If you have made yourself thoroughly knowledgeable about the market and have established a trustworthy network of connections, you are also more likely to find opportunities to acquire pieces below market prices.
3. Make sure that you select from a pool selected by recognized experts as they would know which artworks or artists are important.
Ventura, for example, has participated in exhibitions here and abroad, and has consistently won awards for his exemplary work. His first outing at Sotheby’s Hong Kong in 2008 earned for him $62,000.
4. As art is a valuable asset, take care of it by ensuring that it is stored in the proper environment or displayed in the correct lighting conditions.
Look at the state of the artwork. Is it in excellent condition? Are there any signs of wear and tear? A damaged artwork quickly loses its value.
5. Authenticity is not established by a piece of paper.
Just as there are attractive rewards in investing in art, there are unpleasant risks. “The primary risk is, of course, acquiring a fake artwork, which is essentially money down the drain. To minimize your risk, go to a venue with a reputation for expert knowledge and who can provide you with that seal of quality and peace of mind knowing that what you have acquired is indeed authentic,” Lerma relates.
As with any investment, remember that it is best to make an informed decision. If you are not confident with your planned purchase, reach out to experts, or highly reliable sources with excellent art credentials and a sterling reputation.
And when you decide to sell, you’ll find that having made the right purchase will also ensure a good return on your investment. Lerma says, “The price gain over time varies greatly, but it is not unheard of—in the case of certain contemporary artists—to have an annualized gain of up to 50 percent over, say, five to seven years. The key is insight, guidance, and timing.”
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