table of contents
1. Introduction
2. Why is contemporary art attracting attention as an investment target?
3. How is the value of contemporary art determined?
4. The basics of contemporary art investment that beginners should know
5. Contemporary Art as an Investment: Benefits and Risks
6. How to get started with contemporary art as an investment
7. Summary
1. Introduction
In recent years, contemporary art has been gaining attention as an investment target. It has become a hot topic that art is not just a hobby, but also has value as an asset, and art purchases are increasing, especially among the newly wealthy and corporations. However, some people may feel that "investing in art" is a bit intimidating.
This article will explain the investment value of contemporary art and provide a clear explanation of the basics that collectors need to know. It will also provide a comprehensive introduction to the market trends and mechanisms for determining value of contemporary art, as well as points that beginners should be aware of.
2. Why is contemporary art attracting attention as an investment target?
◯Increase in asset value
The contemporary art market has been expanding in size in recent years. Within the art market, contemporary art is a particularly fast-growing sector, and it is not uncommon for works by famous artists to fetch high prices at auction.
For example, Banksy's "Love is in the Bin" below was sold at auction in 2021 for approximately 2.5 billion yen. Immediately after it was sold at the auction, the work was shredded by a shredder installed in the frame at the venue, further increasing its value. In this way, the "value of contemporary art as an asset" is gradually being established.
Image taken from https://bijutsutecho.com/magazine/insight/24806/pictures/3
◯ Portfolio diversification effect
Art has different price movements than other investment products such as stocks and real estate. Therefore, combining it with financial products can be effective in diversifying an asset portfolio. Since the pandemic, as inflation continues and prices rise, economic uncertainty has increased, and art, with its relatively stable asset value, has been attracting attention.
◯An engaging ownership experience
The greatest appeal of art is the joy of owning it. Unlike other investment products, art can bring you a sense of spiritual satisfaction that goes beyond investment by displaying it in your home or using it as interior decor in your office.
3. How is the value of contemporary art determined?
When faced with contemporary art, many people have a question: "Why does this painting cost hundreds of millions of yen?" The answer is not simple. The value of contemporary art is determined by more than just artistic "technique." Here, we will explain in an easy-to-understand way the complex mechanisms behind it.
◯ "Concept"
Concepts are important in contemporary art. For example, works that sharply satirize social issues, like those of Banksy, are highly valued for the messages they convey. Also, works like "Fountain" (photo below) by the French artist Marc Duchamp, also known as the father of modern art, who signed a men's urinal and presented it as an artwork, attempting to redefine everyday objects as works of art, ushered in a new trend in art history. What determines value here is not "technical skill," but the historical context and cultural significance.
Image taken from https://www.artpedia.asia/fountain/
◯“Market”
There are many players who manipulate the value of art, such as galleries, auction houses, and critics. When a particular artist becomes popular as an "investment target," the value of that artist skyrockets. This symbolizes the unique nature of contemporary art, where paintings are treated like "stocks."
◯ "Uniqueness"
This is an important factor. When there is only one physical piece, or with the addition of new technologies like NFTs (non-fungible tokens), the scarcity of the piece increases its added value.
To understand the value of contemporary art, we must explore the intersection of meaning and price, which goes beyond the mere act of looking at a painting and serves as a mirror reflecting cultural, social, and economic trends.
4. The basics of contemporary art investment that beginners should know
◯ Use trusted galleries and platforms
When beginners first purchase artwork, it is important to use a trusted gallery or online platform. Galleries not only provide professional advice, but also guarantee authenticity and provide artist information, allowing you to make a purchase with confidence.
Additionally, there are online platforms such as the following online shops where you can negotiate directly with artists.
FROMARTIST
FROMARTIST is a Japanese online platform where you can purchase directly from artists. It has a proven track record of sales, handles a wide range of art genres, and has a large number of works and artists. It has been featured in many media outlets, including television, magazines, and newspapers, and has also hosted events at art museums, so you can use it with confidence.
◯Prioritize what you like, not just the asset value
When choosing artwork, it is important to choose something that you "like." By choosing a piece that you would be happy to own, rather than just considering market value, you will gain more joy than just investing.
Check out smaller art fairs and emerging artists
Even if you can't afford the expensive works of famous artists, there are many cases where you can purchase beautiful works by young artists at relatively affordable prices. There is a possibility that the works of young artists will rise in price in the future, so it is also recommended as a way to support promising artists.
Artist: Kasumiran
Title: Flower of Hope II
Price: ¥11,800
Work details: https://from-artist.com/products/kibounohana-ii
Artist details page: https://from-artist.com/collections/kasumiran
5. Contemporary Art as an Investment: Benefits and Risks
◯Advantages
Long-term asset value: Historically, artworks have tended to increase in value over the long term.
- Emotional satisfaction: Owning something gives you emotional satisfaction and enjoyment.
・Economic risk hedging: You can diversify your portfolio as an asset other than stocks or real estate.
◯Risk
Market liquidity: Artworks cannot be immediately converted into cash.
-Fluctuation in value: There is a risk that the price will go up or down depending on the artist's evaluation and market trends.
・Storage costs: For expensive works, preservation and insurance costs are high and there is a risk of theft.
6. How to get started with contemporary art as an investment
Here are some steps beginners can take to start investing in contemporary art.
◯ Do thorough research
First of all, it's important to learn about the art market. Make it a habit to visit galleries and check auction results. It's also important to pay attention to promising young artists and works that are gaining recognition. Many artists post their works on social media, so you can easily research them from home.
Start small
You don't have to buy expensive pieces right away. Starting with affordable prints and NFT art will help you get a feel for the art market.
Get professional help
You can reduce the risk of failure by seeking the advice of gallery staff and art advisors, who are experts with a deep knowledge of art.
7. Summary
Contemporary art is not just an investment, it is a special entity that can bring joy and emotional satisfaction to those who own it. The key to successful art investment is to understand how value is determined and market trends, while choosing works that you truly "like."
Even if you're a beginner, why not use this article as a reference and take your first step into the world of contemporary art? Your encounter with art will enrich your life.
FROM ARTIST has approximately 700 artists from all over Japan registered, and you can view many of their works on its website. They also sell paintings, so you can enjoy them in your home as if they were in a museum.
If you would like to know more, please feel free to contact us.
Please also add us as a friend on the official FROM ARTIST LINE.
If you would like to purchase, please click here ▶︎ https://line.me/ti/p/%40517rkxah
For artists, click here ▶︎ https://line.me/ti/p/%40433xxkes
Written by: MIKIKO
FROM ARTIST Management staff. I write columns. I provide management support so that we can convey the appeal of artists.
Supervisor: Shoma Toida
CEO of BUSCA LLC. Head of FROM ARTIST. Started his career as a marketer, he worked for a business company and an advertising agency before going independent. He completed marketing-related programs at several graduate schools and business schools, including the University of California, Berkeley and London Business School. He also completed the MBA core curriculum at Macquarie University and studied the importance of art in education at the University of British Columbia.
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