Highlight: Art investing - Concentrate on the crazy stuff

Contemporary art refers to work produced after 1970, with a further generational rush coming after the 1980s. This rush converted contemporary art to the position that pop music occupied in arts culture and media during the 1980s: an era of independent record labels with a real entrepreneurial spirit, with indie music providing a platform for musicians, DJs, graphic designers and, of course, investors.

 

Having taken a hit during the recession, the contemporary art market seems to have already bounced back, the absolute proof being at auction - and the fact that surprisingly few London galleries were forced to close last year.

Big names Peter Doig and Idris Khan were not the only ones to see fast-rising prices during the recession. Independent surveys saw rises for South African painter Ansel Krut, London ink painter Francesca Lowe, Venezuelan modernist Jaime Gili and taxidermist Polly Morgan.

Contemporary collectors should visit established spaces which have been in business for, say, five or more years. These venues will have built a small group of exclusively represented artists who have gone beyond their initial exhibitions and have begun to build a market for their work.

Buyers should expect to pay £3,000 to £6,000 for something worth having - a small painting or sculpture, an editioned photograph, or something more adventurous, such as a solid silver nail or the artist's hair.

If collectors are buying for investment, they should concentrate on the crazy stuff. If you don't 'get it', but it does something for you, buy it. If it offends you, but you can't get it out of your head the next day, buy it. At the very first Warhol shows, his screenprint paintings and cardboard Brillo boxes sold for $50 (£33). They eventually sold at auction for millions.

Collectors should always buy privately after lengthy discussions with the gallerist, at the beginning without an adviser or fund. The real fun is in the find - getting the information, viewing the work before the general public, negotiating a good deal.

Importantly, buyers need to see more and more art and compare prices, reviews, exhibitions and purchases. It is a time-consuming process - but an exciting one which will shape your own taste.

To take an example of how this fits into a diversified art portfolio, a £100,000 sum could buy a few holdings for roughly £20,000 each - two in contemporary, one modern photograph, one Victorian unique photograph and a couple of nice pieces of furniture or textiles. Buyers should also save a little for maintenance costs such as storage and insurance.

In the emerging artists market, fakes are rarely an issue, but collectors should remember the one problem which affects dealers and galleries - liquidity. A gallery may have the next pickled shark or Angel of the North sitting in the corridor, but be unable to convert it into cash.

Whatever collectors decide to do in the contemporary art world, they should keep up with it. A buyer shouldn't purchase just one piece from a young artist. They should get serious and buy the whole exhibition - if the gallery will in fact sell it to them.

They should remember that in buying a piece of work by an artist, they are supporting them. They should get more involved, pay for the artist's studio for a year. They should sponsor their book or catalogue, or commission something if they can.

Ultimately, collectors should read a lot, see a lot, buy a lot. Now is exactly the right time to do it.

Tot Taylor is co-founder and director of Riflemaker

Main points:

- Having taken a hit during the recession, the contemporary market seems to have already bounced back, the absolute proof being at auction - and the fact that surprisingly few London galleries were forced to close last year

- Contemporary collectors should visit established spaces which have been in business for, say, five or more years. These venues will have built a small group of exclusively-represented artists who have gone beyond their initial exhibition and have begun to build a market for their work

- In the emerging artists market, fakes are rarely an issue, but collectors should remember the one problem which affects dealers and galleries - liquidity. A gallery may have the next pickled shark or Angel of the North sitting in the corridor, but be unable to convert it into cash.


* reprinted by permission from FT Advisor