- Joined
- Dec 13, 2022
Art you buy through galleries can usually be resold for current value (ideally more than you paid), less commission either to a gallery or an auction house. I have done this once or twice and “made” a little money or swapped for something in the same ballpark, but the art market is fickle and slow, so I wouldn’t (EVER) choose it as an investment strategy in the least
If you're buying a decent artist from a good gallery, they'll be holding significant amounts of that artists work as stock and so will engage in a fairly high degree of price support. If one of artist X's paintings goes onto the open market and achieves a true value that's just a tenth of what the retail price of the paintings sell for, they're screwed. All that stock they're holding becomes worthless. All those customers who bought work from them in the believe that they'd at least hold their value if not appreciate will be furious and might want to be made good. So when the paintings come up for auction, the gallery will ensure the price doesn't fall too low.
But a couple of economists did a study of the returns made by art over the last fifty years. They identified 2.3 million paintings that have been sold in that period. Of those, just 32,000 had sold more than once. Where are the other two and a quarter million paintings? The economists hypothesis is that they aren't traded because they'd sell at a significant loss.
I'm always struck by the values of paintings on the Antiques Roadshow by painters who were well regarded artists in their day, but who were never at the cutting edge of some important art historical movement, so are at most, a footnote in the history books. The prices invariably depend on how decorative the painting is and whether there is a significant body of collectors interested in that artists work, but I'm always shocked by how little they're valued at once they no longer have a gallery actively maintaining those artificial price supports.
I'd highly recommend Don Thompson's books, The 12 Million Dollar Stuffed Shark: The Curious Economics of Contemporary Art and The Orange Balloon Dog: Bubbles, Turmoil and Avarice in the Contemporary Art Market if you have any interest into how the economics of the art trade works.