Tom: Are there differences in value for the same artist?

 

Mark: Yes. First of all, there is almost always a range of values according to medium. You know, paintings versus sculpture versus watercolors versus pencil drawings. As a general rule, you will pay more for an oil painting than you will for a pastel, and you’ll pay more for a pastel than you will for a drawing.

 

But there is one notable exception. A medium that an artist is “known for” will always demand the highest price. For instance, the artist Andrew Wyeth is known for his watercolors. Those will get the top pricing. But if you know your artist you will know this.

 

The other factor that comes into play is size. As a general rule, the larger the piece, the more expensive it will be.

 

A third thing is period. Most museum-level artists are best known for certain periods. Their works that were composed during those periods are therefore considered more valuable.

 

Finally, there is image. Certain artists are best known for certain images. André Derain’s “best” images, for example, are somewhat abstract. When he got older, he reverted to a more representational style. These pieces are beautiful... I have one. But they will not fetch the prices that his abstract works do.

 

One last thing—it is better to buy a top-quality, wholly representative work by a second-tier artist than an uncharacteristic piece by a major “name.” So many collectors get wooed by names and prestige. But nobody wants a painting of a barn by Jackson Pollack. They want his “splatter” work.

 

Tom: Seems like a lot to know.

 

Mark: Not really. There are about half a dozen good websites that track auction prices of investment-grade artists. All of these will give you the key elements: the image, the medium, the size, and the year. You can study them and learn them very quickly.

 

Tom: So, when I’m looking at an artist’s body of work, how do I know what to buy?

 

Mark: In collecting in general, you always want to buy the best you can afford. If you are very rich, you should buy large paintings or sculptures with the right image, painted at the right period. The best of the best is going to appreciate the most. For example, if you were buying a Karel Appel, you’d want to buy a colorful abstraction in oil of a figure that is dated in the 1950s or the early 1960s.

 

Tom: Okay, so now that I know what to buy, where do I go to actually buy it? Do I have to participate in some kind of auction or do I pay a broker to get it for me, or do I go to a store and just pull out my checkbook?

 

Mark: There are several places you can go: galleries, auctions, and private owners.

 

Galleries will sell you their products at retail, which means they will charge you 50% to 100% more than what they paid. As an investor, you can’t afford to pay that kind of premium. But sometimes galleries buy cheap and don’t insist on such big margins. If you know what you should be paying (by educating yourself) then you can negotiate.

 

Auctions charge a premium, too. Usually it’s 10% to the seller and another 10% to the buyer. That’s not a trifling amount, but it can work if the piece sold is sold at a price that is considerably under its retail value. This happens all the time at auctions. Again, you just need to know the right price to pay and don’t bid above that.

 

The best venue is a private sale. I’ve just bought a few great pieces from a private collector who ran into financial difficulty and wanted to raise money fast. By buying privately, you can sometimes get paintings at rock bottom prices and with no commissions. Again, it’s critical to know the right price.

 

On a side note: it is remarkable how many collectors pass by antique shops and estate sales. This is an environment outside the gallery scene or auction house that may house bargains and sleepers. That grimy oil landscape (which can be cleaned) could be a hidden gem. I came across many items in my collection this way.

 

When buying investment-grade art, be cautious. There are lots of forgeries in the market, especially of popular artists like Salvador Dalí and Wilfredo Lam. You can’t protect yourself from this problem by buying only pieces that have good sales records. Buy from reputable dealers and auctioneers. Ask for a complete provenance. And you can always have the work looked at by an expert if you have any doubts.

 

Tom: Do you have anyone you can recommend?

 

Mark: For matters like that, I go to my friend Roger Hurlbert. This guy knows everything about art. He has been an art history professor for over thirty years and wrote a fine arts column for The Sun Sentinel for twenty years. He has also been an art collector and a buyer for clients for decades. He has literally attended hundreds of exhibitions, met and interviewed tons of artists, and personally dealt with more dealers and gallery owners than anyone I can think of. In fact, we should publish his contact information in this piece.

Tom: Ok, we will. Well, thanks Mark. We'll see you next week.

 

Mark: My pleasure.

 

“Do’s And Don’ts” Of Art Collecting   By Roger Hurlburt   DO some homework. Check out exhibitions, prices, and, most of all, what the artist creates that might interest you. The Internet has changed everything. Most of the time, it is easy to research an artist via a website.   DON’T make a gallery owner your art advisor. Galleries are great places to visit, but remember that gallery owners are in the business of selling. They will be high on their wares no matter what. Avoid the hard sell, the promise of how prices for the artist’s work will surely soar, the “better get one now” pitch... that sort of stuff. No one can predict an artist’s market.   DO some traveling. There is nothing wrong with living in Kansas and buying art at a local art gallery. But if you strive to put together a collection of beauty, interest, and value, you must go to New York City. Since WWII, Manhattan has been the hub of the art world, and every artist longs to exhibit there. Want to find new and exciting talent? All art roads lead to The Big Apple. Look about the multitude of galleries both old and new, big and small.   DON’T expect the average interior decorator to fill your home with fine art. They are adept at “furnishing” a residence with art objects for a hefty fee. But virtually none will ever be worth anything. Often, for nearly the same budget, the homeowner can become a collector of material of value. So maybe there isn’t the sense of immediate gratification. Patience is a collecting virtue.   DO pay heed to the words of art critics and reviewers. Their observations are born of knowledge, objectivity, and an intimate connection with the art trade. If they say some up-and-comer is worth watching, watch that artist. And, if you like the work, consider buying it.   DON’T buy art at a gallery that runs “sales.” Prices for viable artists—established artists whose work may or may not appreciate—invariably rise, but they NEVER go down. Never. Steer clear of mall galleries and ersatz art emporiums that are really framing stores in disguise. And those weekend hotel-lobby extravaganzas promising “original oil paintings.” If you want to match a painting to the hues in the couch cushions, call your decorator.   DO maintain a sensible art-buying budget. You don’t have to mortgage the house to collect quality art. Collecting does cost money, but it is not how much money you spend—it is what you spend your money on.   DON’T “invest” in copies, facsimiles, or reproductions. They are worth nothing—tangibly or emotionally. All collectors, whether or not they recognize it, desire satisfaction in a work of art. Something outwardly bogus will never deliver.   DO develop and follow your own collecting eye, taste, and spirit. Shy away from trends, who celebrities buy or endorse, and who just caused a sensation at the Venice Biennale. Art collecting is one of the most personally rewarding of endeavors if you stick to your own emotional and visual guns.   Don’t consider becoming an art collector if any of the previous “do’s and don’ts” make little sense. There are always baseball cards, Beanie Babies, and vintage wines to collect.   Contact Info:    Roger Hurlburt is an art historian, fine arts critic, and acquisition consultant. He helped us with this column.   If you would like to contact him, you may call him at (561) 251-9860 or email him at rhurlburt2@bellsouth.net.

 

Editor's Note: Investing in collectible art is one of the many wealth-building strategies we discuss each month in The Palm Beach Letter. Most  financial newsletters only focus only on stock picks or trading plays. At The Palm Beach Letter, Mark Ford, a retired multimillionaire, also shows our readers several little-known, yet highly effective investment strategies they could use to consistently grow and protect their own wealth. To learn more about The Palm Beach Letter, click here.