For many Canadian art aficionados, building one’s own collection is a sizable goal. How does one start collecting? Where can one find the best artists and pieces that resonate? What’s a good investment and what should be avoided?
Like any other objective, acquiring art is a goal that needs careful planning. Particularly within Canada, whose burgeoning art scene is bringing new collectors into galleries and online auctions, awareness of the market and its pitfalls can mean the difference between a collection to treasure and regrets or worse, losses.
Having worked as an underwriting manager for AXA XL’s Art division in Toronto, I’ve worked with clients and the art industry to help make the art collector’s experience more enjoyable and less risky. Over the years, we’ve developed a checklist for collectors to use to ensure they’re investing wisely.
1. Set a budget.
Art can be expensive, and first-time collectors can be discouraged quickly by price. However, there are plenty of entry-level or mid-level investment opportunities for collectors on a budget.
There are art fairs and galleries that cater to collectors who are looking for more affordable art options. Even so, it is always smart to set your maximum purchase price before you begin building your collection.
This is where an art advisor can be a great ally. While there is usually a fee to hire an art advisor, the advisor can work with first-time buyers from several vantage points. Working on your behalf, an advisor can direct investors to options based on the budget, which include: specific eras that match the investor’s tastes; artists that align with both taste and price point; galleries or online sites that offer options in that price range, or; artists or pieces similar to ones that appeal currently.
2. Build a network in the art scene.
Established collectors have something beginning collectors need – a network. The art world is vast, and there are scores of options available. However, without a roadmap, new collectors could quickly get lost. Building relationships is essential.
Visit galleries, make use of online resources. Art fairs too are an excellent source of contacts, and collectors can discover new artists and styles. Connect with gallery owners and museum owners. Build a circle of contacts in the art scene, and learn what you can from them. Take advantage of who someone knows who may have similar tastes and art appetite to yours. An art advisor can help with developing these relationships, as well. Advisors know other collectors, and can point you in the direction of those with similar styles and budgets.
3. Learn how to buy.
While building a network, collectors should be researching the market. With most operations moving online due to COVID-19 restrictions, research is easily accessed. Online art fairs, auctions, and galleries can give art collectors a sense of what the buying process is like before they are ready to purchase. Global auctions can give buyers a good sense of the overall market for art, and can help collectors refine their own style.
Knowing how the buying process works, particularly in an auction setting, can help you understand what kind of budget you might need to begin collecting, or how much you might need to rethink your budget as your tastes mature.
Understandably, larger auction houses cater to a different caliber of works and to collectors with ample budgets. Still, observing the process and being in that setting, whether in person or online, is a learning experience. You will be able to observe the description of the work, the bidding, and the hype surrounding certain pieces of art. That kind of advanced knowledge can prepare you for your own art-buying process. The more you understand what goes into how a painting is valued and what attracts buyers to certain artists, the better your own selection process.
While it will take longer than just a few weeks to become adept at art collecting, starting with understanding the market and the sales process helps.
4. Avoid impulse buying.
That same observation will help you avoid impulse purchases. It is common for collectors to be at a gallery, museum, or art fair and find one piece they want to buy immediately. However, it is equally common that buyer’s remorse may set in a few days, weeks, or months after that purchase.
Instead of allowing the excitement to overcome, step back. Walk away, go home and research that artist, that style, that particular piece. Consult with your art advisor. Mention what you were drawn to, and then allow them to educate you more on that style, era, or medium that appeals to you.
If you are interested in art for the investment, an advisor can show you the investment quality of that piece. They can also point you how that artist’s work has performed over time, and where need be, they can introduce you to similar artists and works that may hold more investment value, and can help you align your purchases with your investment strategy.
Whatever your goal with art collecting, do not let the excitement of a new find blind you to your ultimate goal.
The more you understand what goes into how a painting is valued and what attracts buyers to certain artists, the better your own selection process.
5. Diversify your collection.
Part of that goal should be how to diversify your collection. If you intend to purchase a set number of works per year, diversify what those pieces will be. An advisor can be instrumental in guiding you toward other artists and sources of art. Different galleries vary in what artists and eras they represent, and your advisor can direct you to galleries and shows that can help you expand your collection’s diversity.
Also, diversify where your investment dollars will go. If you intend to purchase five works in one year, try not to spend an equal amount on each one. If you spend $1,000 on one work, spend less on the next. That helps you maintain a variety of works more easily. The value of a work, whether current or future value, is not defined necessarily by today’s sales price.
6. Look for a paper trail.
What can help define that value is documentation. In all purchases, collectors should be seeking out certificates of authenticity and provenance – the place of origin or earliest known history of the work. Too many times, collectors have purchased what they believe to be authentic works only to find out later the work was a fake.
Relying on the word of a gallerist, field expert, or art dealer is not enough, especially when it is your investment at stake. In such nonrefundable transactions, buyers should be diligent in seeking out the documentation of the work, its origins, and the artist.
Some of the safer places to purchase works include art fairs. Galleries showing at many art fairs are vetted by the fair committees, and they have passed the guidelines for exhibiting. These galleries are more likely to bring documentation along with any work they are selling.
7. Remember the 4 key elements of buying.
All collectors should strive to operate under four key elements of collecting:
- Know what to buy
- Know how to buy
- Know when to buy
- Know where to buy
Focusing on these four elements can guide any prospective collector in the right direction.
8. Keep an open mind.
While much of art collecting is based on the emotional reaction a work elicits, it should also be based on sensible choices. Whether it’s an advisor or a friend or a gallery owner, glean as much information as you can on the work. Listen to the advice given by experts. Go into the collection process with an open mind and rely on the resources that are available.
That applies to doing your homework, too. Walk into a gallery, a museum. Take advantage of the free or low-cost education inherent in these locations.
Art collecting in Canada’s growing art scene can be an exciting, enjoyable endeavor. Plan your purchases to avoid costly mistakes. Research your market, educate yourself on how to purchase, and consider hiring an art advisor to help you develop your understanding of the market, and help you get more enjoyment from your collection.
