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Alternative investments: contemporary art

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We can’t all afford to buy an old fine art master, but there is money to be made in the contemporary art world. It simply requires some spare cash to spend and the ability to take your time, watch the market and make informed purchasing decisions.

So if you’re thinking of investing in art, read my eight top tips to help you invest wisely:

1. Remember contemporary art is accessible. In 2008, over 1,000 Picasso’s were sold for under £5,000. Also, you can pick up undiscovered talents for far, far less and sit and wait for their stock as an artist to rise, along with your profit.

2. Start visiting art fairs and online galleries, as well as your local independent galleries. Don’t be intimidated. Ask questions. The art industry is famously friendly and will help talk you through the work they are showcasing. By spending time looking at art, you can begin to understand what your taste is; after all, investing in art is much more fun if you truly love the pieces you have bought.

u20283. Only spend what you can afford and don’t gamble on quick turnaround. Buy it because you love it rather than see it as a future profit generator. By doing this if a picture doesn’t sell as soon as you had hoped you still own a piece of art which gives you pleasure each time you look at it.

4. Target trends. Keep an eye on what is fashionable and who people are tipping as the next big thing. Who knows if you are clever you could be sitting on the next Banksy or Damien Hirst before they hit the big time! Buying art based on cartography or iconic figures tends to be a safe bet. By way of example Cityscapes have remained very saleable for several years and still remain popular today.

5. Get your picture professionally framed immediately. This will safe guard the piece of art as well as add instant value. A beautiful quality frame will transform any picture into something special. I have looked at many unframed pieces of artwork by many great artists but it isn’t until it sits within the frame that it really comes to life. Spending money on a quality frame and mount is money well spent.

7. If you are buying a print make sure it’s a limited edition. The less in existence, the more valuable it is likely to be in the future. You should also get a certificate of authenticity signed by the artist. Once a published print is set at an edition size, say 95 images, then by law this is the limit for this picture, only 95 can ever be made. Many art collectors follow a particular artist buying every print and sometimes an original or two along the way. If you have backed the right artist and his or her work has continued to increase in value then having a full or even part collection can be very attractive as an investment. u2028

8. Finally and most importantly of all, nothing in life is guaranteed and art is no different. Prices can go down as well as up; it’s no different to buying a share in a business. Only invest sums you can comfortably afford and don’t rely on a quick return.

Graham Finch is MD of online art trading portal Blutulip.

Read our alternative investments series here

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