{"id":247,"date":"2008-12-15T10:00:21","date_gmt":"2008-12-15T18:00:21","guid":{"rendered":"https:\/\/barbaraguggenheim.com\/bg\/?p=247"},"modified":"2012-02-26T08:44:35","modified_gmt":"2012-02-26T16:44:35","slug":"smart-collecting","status":"publish","type":"post","link":"https:\/\/barbaraguggenheim.com\/bg\/smart-collecting\/","title":{"rendered":"Where Smart Collectors Are Investing Now"},"content":{"rendered":"

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By Barbara Guggenheim<\/strong><\/p>\n

Many collectors still see the art world as one of endless opportunity.<\/h2>\n

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Because I\u2019m an art consultant, I\u2019m constantly asked what\u2019s happening in the art world these days. Like most business, it\u2019s been affected by the plunging economy. More than one client has called, crying, \u201cI wish I had bought that painting you offered me six months ago. I wouldn\u2019t have had that money in the market. I would have had SOMETHING I could look at and enjoy.\u201d<\/p>\n

But what to do now? That\u2019s the rub. Even seasoned collectors are asking, \u201cShould I buy? Sell? Hold? Or what?\u201d History may be helpful; analyzing the art world over the past ten years may be helpful in understanding how to maximize your spending power while giving your own collection a boost.<\/p>\n

The sea change this decade isn\u2019t one of taste, as in the \u201890s\u2026This time, it\u2019s the way business will be conducted.<\/p>\n

In the past few years, the market for contemporary art enjoyed a dramatic trajectory, and captured the most interest and media attention. It behaved quite differently from the rest of the art market. Years ago, when I began as a consultant, I\u2019d take clients to the shows of the hot artists. Prices were in the $3,000-$30,000 range. If you weren\u2019t sure about the work, no problem. You could wait until the artist\u2019s show to see how the artist developed, and although prices might move up a bit, you could take your time before making a decision.<\/p>\n

In recent years, however, as the numbers of collectors increased, all looking for the next Warhol, new work was grabbed up almost as soon as the paint dried. No longer could you take the time to ponder. If you didn\u2019t pounce, the work could well double, triple, or suddenly leap into the hundreds of thousands or even millions in the next show. Suddenly, you had to be a museum or substantial collector to get a piece, and most people chasing the new work were given a polite kiss-off. They could put their names on a waiting list. In gallery-speak, that meant, \u201cForget it. You\u2019ll never get one.\u201d<\/p>\n

When auctions started selling the works of these hard-to-get contemporary artists, collectors who were getting the brush-off from the galleries saw a way to get what they wanted. Now collectors, adrenaline racing with competitive zeal and willing to pay a premium over gallery prices, could slug it out against each other in bidding wars. There were enough young hedge fund managers and others making record money who didn\u2019t care if they paid a few hundred thousand more for something if they could drop the name of their conquest at a dinner party. The competitive name-dropping soon extended beyond the hot artist to the star dealers. At a dinner, my partner, Abigail Asher, asked a young investment banker what he\u2019d bought recently. His answer: \u201cI just bought a painting from Gagosian.\u201d Abigail countered, \u201cI asked WHAT you bought, for heaven\u2019s sake, not WHERE you bought it from.\u201d<\/p>\n

Buyers of hot artists realized that they could flip their works at auction and make quite a killing. In November 2007, Abigail and I marveled that a Damien Hirst spin painting, dated that same year, was sold at auction. Even if it was painted in January and it was left to dry a week or two, then shipped to the dealer, who unpacked, photographed, and catalogued it, by the time it was sold by the dealer and somehow made its way to the United States, it could have been consigned no later than the end of August for the November auction. At most, the owner could have had it only for two or three months. Headspinning.<\/p>\n

I don\u2019t know why there was such an outcry when Damien consigned enough paintings and sculptures to Sotheby\u2019s to create an auction all by himself. Chinese artists have been selling their works at auction for years. And people have been buying them on spec, hoping that when millions more Chinese become millionaires, they\u2019ll all want their national patrimony.<\/p>\n

During this period, if you had and wanted to sell a work by a hot artist, or any important painting, it became clear that auction was the way to go. The two major auction houses, Sotheby\u2019s and Christie’s, competing against each other, would be falling all over themselves to give you a splendid guarantee (an amount they\u2019ll pay you, no matter what the piece brings at auction), as well as sharing the buyer\u2019s commission with you and sometimes even giving you such bonuses as a single painting catalog. Dealers complained, and it began to appear that the art world would resolve itself into two auction houses and only a small handful of dealers.<\/p>\n

Now, all that will change. The sea change this decade isn\u2019t one of taste, as in the \u201890s when collectors turned away from Impressionism and moved into collecting Contemporary art. This time, it\u2019s the way business will be conducted. No longer will auctions be the center of the universe. If you have significant works to sell, you\u2019ll probably give them to dealers, not auctions. The days of the guarantees from the auction houses are over\u2014at least for now, and if the market remains volatile, you won\u2019t want to risk having your work publicly tainted by not selling at auction. Of course, if your business is seriously down, or you were an investor with Bernie Madoff, you may not want to be publicly perceived as a loser who needs to sell. If so, you\u2019ll probably consign to a dealer.<\/p>\n

Although the fall sales were dismal, some weren\u2019t as bad as you might think. In the Impressionist and Modern sales, for instance, items that had come up before in the past ten years or so did quite well. In times like these, those aren\u2019t bad profits.<\/p>\n

These results and similar experiences some collectors have had, both at auction and privately, have confirmed many collectors\u2019 faith that art is still a good long term investment. Some collectors are bottom fishing or making post-sale offers for works that didn\u2019t sell at auction. Some are paying record prices to get the unique gems they want, and some are sitting this season out saving their cash for great things that may soon shake loose. Whatever their strategy, there are smart people who still see the art world as one of endless opportunity. If you haven\u2019t bought art, maybe it\u2019s time to dive in\u2014but be careful.<\/p>\n

Barbara Guggenheim regularly contributes humor to W and ELLE magazines. She’s written several books, including\u00a0<\/em>Decorating on eBay<\/a>\u00a0and\u00a0<\/em>How to Be Smart Money in Art\u00a0.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

By Barbara Guggenheim Many collectors still see the art world as one of endless opportunity. Because I\u2019m an art consultant, I\u2019m constantly asked what\u2019s happening in the art world these days. Like most business, it\u2019s been affected by the plunging … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":248,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[10,11],"tags":[],"class_list":["post-247","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-art","category-magazine-articles-by-barbara"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/posts\/247","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/comments?post=247"}],"version-history":[{"count":5,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/posts\/247\/revisions"}],"predecessor-version":[{"id":340,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/posts\/247\/revisions\/340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/media\/248"}],"wp:attachment":[{"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/media?parent=247"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/categories?post=247"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/barbaraguggenheim.com\/bg\/wp-json\/wp\/v2\/tags?post=247"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}