Missing Art Basel Miami? You can still buy art from home | Opinion
With many South Floridians working from home, it is important to look at your surroundings with pleasure. An investment in fine art is a straightforward way to elevate your home and lift your spirits.
A passion for art is the best reason to consider building a personal collection for your home. That’s what drove me to begin purchasing works by contemporary Black artists many years ago. For me, it was important to understand the artists’ individual stories and perspectives on life, as well as how they expressed their ideas visually. The result is a collection that enriches my day-to-day life.
If you decide to become a collector, now is an ideal time to explore the art world online. The COVID-19 pandemic has forced Art Basel and other major art fairs to sell their offerings virtually, rather than the traditional in-person bidding. The result is a dramatic difference in the sales process, a trend that is also affecting galleries and dealers.
I believe art is now a buyer’s market, where savvy collectors may be able to access works that normally would be too difficult to acquire. Buying art at a discount could also mean potentially higher appreciation in the years ahead. However, some works are still commanding a premium, such as those by Black and women artists.
So, even though Art Basel will not be coming to Miami Beach this year, an online version will be held Dec. 2-6 with new works by a number of international galleries. Keeping this in mind, there will be many opportunities for art collectors to expand their knowledge and grow their collections in the months ahead.
A collecting strategy
Before making an investment in fine art, there are several issues to consider. First, think about your personal goals. Where does art fit into your life? Do you want one masterpiece to display in your home or less expensive works that could appreciate in value? Do you want to support a young or emerging artist or focus on an international area such as Europe, Latin America or Asia?
Next, you should explore the art world until you feel a connection with a certain era, style or artist. You could specialize in modern, or hypermodern paintings, bronze sculptures, tribal masks, or works by LGBTQ artists, to name just a few of the possibilities. Let that sense of connection draw you into the field, as you begin to collect or expand your holdings.
One strategy for new collectors is to start small by purchasing multiple lower-cost works before taking the plunge with a masterpiece. This allows you to experience works by different artists, perhaps in prints, drawing or photographs, allowing you to hone your taste while increasing your knowledge.
Be a smart online shopper
Before making a purchase, you should do your homework. Talk with dealers and gallery owners, and do online research to educate yourself about the market. All auction prices are public, making it relatively easy to do online research. You may also want to engage an experienced art advisor before you start making significant purchases.
Auction houses and galleries offer online tools to market their works. For instance, many galleries have online viewing rooms that focus on one artist with videos and other content. If you are interested in a certain work, ask for high-resolution image files that show the details or request an appointment to see the work in person. You should also learn about the gallery's right of first refusal policies in case you decide to sell a work after purchase.
Protect your assets
As you become a collector, you should be sure to protect your artistic assets. Document your purchases, including the history or provenance of the piece, as well as the sales price and information about the artist. Keep them in a secure place, along with photos or a video, in case you sell them or pass them along to your heirs. This is an essential, don’t take this practice for granted.
Display the art in a secure setting where it will not be subject to light, excess humidity or other damaging conditions. You may need to adjust your insurance policy or home security system as well.
Talk with your financial advisor about the implications of incorporating art into your investment portfolio. After all, art can play an important role in diversifying your holdings. Collectors and investors need to independently evaluate particular artwork investments and strategies, and should enlist a professional advisor in the art space for assistance as Morgan Stanley and its Financial Advisors do not provide advice on artwork.
However, it’s important to remember that art is a relatively illiquid asset, like real estate. It can take weeks or months to sell a work of art, unless you are willing to accept a low price. So, you should continue to keep liquid assets like stocks and bonds in your portfolio to cover market downturns.
Looking ahead, you should include your art collection in your estate plans. Talk with your attorney about the most appropriate ways to structure the ownership of valuable works and convey them to your heirs in a tax-efficient manner.
Whether you are new to the art world or a seasoned collector, I hope you enjoy the pleasure of fine art during the pandemic and for many years in the future.
Andrew Menachem, CIMA®, is a wealth advisor at The Menachem Group at Morgan Stanley in Aventura. Views expressed are those of the author, not necessarily Morgan Stanley, and are not a solicitation to buy or sell any security. The strategies and/or investments referenced may not be appropriate for all investors. Follow Menachem on Twitter @AMenachemMS.
