Art investment – How do I invest properly in art? (2024)

For whom can an investment in art make sense? (Use Cases)

People of advanced age who no longer have the opportunity to invest in stocks, ETFs or funds in the medium or even long term due to the shorter investment term and are looking for a strong alternative may find what they are looking for here. If the stock markets collapse, there is often not enough time to ride out the loss. In the art market, there are no or much smaller fluctuations in value, making losses almost impossible. Example: A man is 67 and receives his lump-sum payout from his life insurance policy (we advise against choosing the annuity for various reasons). He does not need this money immediately and will not need it for at least 5 to 10 years. He has the option to leave it in the account during this period and let it shrink from inflation, invest it in ETFs or similar with the risk of losses or invest it in art to realize value security, inflation compensation and even profit gains beyond that.

Wealthy people who have funds at their disposal which they would like to use to add another asset to their portfolio in the sense of diversification. Example: A woman is 50, she is successful in her job, owns well-diversified assets of ETFs and shares. In addition, she owns real estate and a classic car. An art investment would broaden her asset allocation and reduce risk. It also gives her useful tax benefits when she sells. At a minimum, her heirs will receive the artwork free of inheritance tax.

People who prefer security and physical property to risk and partial ownership for their money, especially in the current times of crises and conflicts. Example: A person who is absolutely risk-averse and (despite our very intensive advice in this regard) does not want to invest in the economy (shares, funds, ETFs) under any circ*mstances, we offer, together with our partner, a variant which, in addition to the aspect of security, nevertheless generates a return that can be over 8% annually.

People who are thinking about their estate. How they can best transfer their assets (i.e. without deductions by the tax office, for example) to the next generations. Example: A widow is 90 and has already given away parts of her assets to her only son over the past decades. Now there is still a property worth €400,000 and funds in accounts amounting to €300,000 left. The son has an inheritance tax allowance of €400,000. Thus, he would get the property “just like that”. Unfortunately, however, inheritance tax would have to be paid on the remaining assets. However, if the widow were now to invest at least part of the cash assets in art as a cultural asset, this part of her assets would be transferred to the next generation without any tax deductions, even if she were to die one day after signing the purchase agreement or paying the purchase price.

Entrepreneurs who do not want to have unused company assets “eaten away” by inflation and reduced by custody fees in company accounts, but who still want to invest the assets safely with the minimum goal of inflation compensation. In addition, this form of investment brings with it special characteristics for companies, which we would be happy to work out in a personal discussion. Example: The Würth company owns a considerable collection of works of art (approx. 18,000 pieces). The collection provides prestige and brings in additional company profits. However, Reinhold Würth, who took over the company from his father in 1954, describes the main benefit as a stopgap for bad times.

“Crypto-winners” who have been able to reap good returns from blockchain technology over the past decade are willing to secure some of their assets from inflation, depreciation and crises. We offer here the possibility of converting cryptocurrencies directly into tangible assets in the form of art, without having to go through the intermediate step into a fiat currency. The whole thing happens anonymously and access-protected. Example: a woman invested in Bitcoin in 2016 and sold it at an opportune time in 2021. She made a profit of one million euros and wants to secure 30% of her assets through our special art investment.

Do you feel addressed?

What should you consider when investing in art?

The art market is broad. There arecountless possibilitiesto invest. Whether you invest in paintings, sculptures, photographs, or other varieties is up to you.Our recommendationfocuses specifically on a particular niche – the“best-performing category”:

Post-War & Contemporary Art Photography(contemporary photography of the postwar period).

Reasons for this are:

It has beenofficially recognizedas an art form since the 1960s.
The development of the prices of the artworks iswell documented.
Thenumberof paintingsis knownand theirorigin is clear.
Important: It is amatter of editions. This makes it possible to establish a binding price. It can be called up at any time and, in general, maximum transparency is ensured. Because there are certificates of authenticity, so that everyone knows who made it and where. There are edition numbers that prove that the photo is one of ten identical copies of a limited edition, for example. And there is an identification number, which basically operates like the vehicle registration of a car.
One becomes thephysical ownerof the artthrough a purchase contractand can freely dispose of the images. We do not recommend investing as a partial owner in a kind of “fractional ownership”, because in this case you are not the sole owner and therefore you are dependent on the decisions of other co-owners.
The photographs areinsuredfor their replacement price.
Each piece issafely stored in a bonded warehouse. As a result, they are alsoexempt from sales taxwhen purchased.
The buyers of such art areprofessionally looked afterby our cooperation partner, an art advisor, and supported in every respect. Be it the purchase, the sale or administrative matters that arise in the meantime.
This Art-Advisor alsolends the artworksto galleries, museums and exhibitions in order to make the works accessible to the public. In this context, the ownersdo not incur additional costs, but the chance of increasing the value of the paintings increases.
Such a portfolio has aminimum value of €20,000. The main reason for this is the spread over several works by more than one artist, in order todiversifyeven within this asset niche and reduce low risk even further.
The Art-Advisor only works withestablished artistswho are on theinternational artist roster, have already exhibited internationally and enjoy a certain level of recognition.65 internationally active artistscan be selected. Emerging artists may have a higher potential to achieve a stronger return, in turn, an initial “hype” from the artist can also quickly sink again. So then does his work and its prices.
The works of art arealways alienable. One has various possibilities here. One can offer the pictures overgalleriesor put over physical or digitalauction housesto the sales. Of course, you can also sell the photospersonallyor use the increasingly populardigital sales channels. Digital already accounted for 30% of total market sales in 2021. For those who don’t want to bother much, the Art-Advisor offers theoption to buy backthe images after a 5-year holding period. This shows the absolute conviction of the company in their product and service.
Of course you can also have the originalsdelivered to your homeif you wish. However, this investment then increases greatly in risk, as the works are constantly exposed to light, are no longer visible to potential buyers and are more difficult to insure. In addition, VAT would then be added to the purchase.

Interested in more information?

One artist as an example: Vivian Maier

https://www.wikiart.org/de/vivian-maier

Perhaps she is theinventor of the “selfie”.
In 2009, her name still yielded 0 results in a Google search.
Then in 2022 there were already more than 4 million hits.
Her works have already graced140 exhibitions in 27 countries and 68 cities.
More than1.5 million visitorswere captivated by her works.
Vivian Maier hasabout 10 exhibitions a year. These are fully booked until the end of 2024. So her works are not available for further exhibitions until then. Galleries can apply for an exhibition starting in 2025. Unbelievable.
By comparison:Andy Warhol’s works grace six exhibitions a year. Gerhard Richter has eight.
Individual paintings by Vivian Maier havedoubled in valueVivian Maier has about 10 exhibitions a year. These are fully booked until the end of 2024. So her works are not available for further exhibitions until then. Galleries can apply for an exhibition starting in 2025. Unbelievable.in the last six years. This corresponds to an annual increase in value of 16.6%.

Herdocumentary“Finding Vivian Maier” was nominated for an Academy Award in 2015 (Available on Amazon Video). Here’s a short form on her story:

Criteria for analysis of artworks and artists

When selecting artworks and artists for client portfolios,precise examination and researchmust take place in advance. Basically, art can be purchased on theprimary market(from artists, galleries) or on thesecondary market(from collectors or auctions). Ideally, a wide variety ofreview bodies and expertsshould be consulted prior to such an acquisition, such as

gallery owners
art critics and professors
curators and
insurance companies.

Through the assistance of such experts and further research of one’s own, one obtains information about variousqualitative and quantitative criteriathat are essential for an overall consideration of a work of art or artist.

Quantitative criteriainclude:

past and present gallery and auction prices
Placements in sales-related rankings
annual turnover on the auction market
number of exhibitions and other art events in the past and future
global distribution of works in galleries
number of placements and nominations for prizes and awards
the success and number of various publications (measured, for example, by the degree to which editions sell out)

Qualitative criteriainclude:

the medium used by the artist (photography, painting, etc.)
education and age of the artist
evaluation by critics
importance and evaluation in the art-historical context
future exhibitions and publications

Numbers – Data – Facts

The“Artprice100 Index”can be used as an indicator of the performance of art. This index recorded a performance of 405 percent from 2000 to 2021. That is anannual increase of 19.2 percent. In the same period, the price of the S&P 500 rose by just under 160 percent (7.6 percent p.a.). However, this comparison is not 100 percent suitable for comparison and should only serve as a rough guide andshow the power of asset art. Additionally, these values do not only refer to the “best-performing category” of photographic art.
ThePost-War & Contemporary Art Indexreturned an average of10.95 percent in value per yearover the period from 2000 to 2021. Our partner’s portfolios exceeded this figure and stand at11.51 percent per year. A strong performance.
Sources: boerse.de / Deloitte Art & Finance Report / Frank Knight Wealth Report / AXA
In 2021, the international art market generated$65 billion in sales. Despite the pandemic, or perhaps because of it, 13.3 billion of that came from online sales. This is a record high. Just 2 years earlier, it was only half. Deloitte estimated that by 2020, $1.5 trillion will be invested in art and artwork. The trend is expected to increase to 1.8 trillion US dollars by 2025. This development ensures that the average consumer will be able to sell his works of art himself evenmore easily and flexiblyin the future and will no longer have to rely so heavily on a gallery or auction houses.
85% ofasset managersrecommend investing in art.
Western art is inhigh demand in the growing Asian market.
More and more people are buying art.Sales at auction increased from €103 million to €6.7 billion between 2000 and 2022. This represents a growth of 6,405% (291.13% per year).
Source: UBS Art Market Report 2022
Theminimum investmentto buy a portfolio is€20,000. The amount is mainly due to internaldiversification. For the above amount, you get about three photographs. These are from different artists. This is to ensure that theriskof an already very unlikely lossis reducedeven further. When buying a single work of art, too little consideration is given to the deeper sense of investment and diversification.
for 76% of all collectors and 96% of the art market experts surveyed,art is an integral part of professional asset diversification.
Source: Deloitte, Art & Finance Report 2021

The numbers speak for themselves.

How much will it cost me to invest in art?

When buying art, theprice of a portfolioof photographs isat least €20,000.
Our customers pay thecurrent market valuefor each piece.
Our partner buys the respective artist’s pictures in bulk at a lower price. Thus, the art can be offered to the customer at the market price.
Annually, thecostof insurance, storage and transportation to/from exhibitions is charged separately at the rate of1.5% of the current asset value.
If you do not sell the photographs yourself, but have our partner help you to do so, or if you wish to take advantage of thebuy-back optionafter 5 years of holding, our partner retains20% of the saleproceeds.

To become anexpertin all areas of life costs a lot of time, effort, nerves, money and is basically impossible. Contact us without any obligation, simply use our expertise and that of our partners and participate best in our knowledgewithout much effort– not only in the field of art and investment.

We give you theinformationyou need to make awise decisionfor you and your money. In the course of this, we answer all your questions about investing andshare our knowledgewith you.

informative – free of charge – without obligation

How does this investment in art work?

View the offer
Sign the purchase contract
Pay the invoice
The art portfolio is delivered to the Swiss bonded warehouse by customs licensed art logisticians
the portfolio becomes your property
you will receive the consignment note
you will receive professional support
you will receive an annual value report with detailed information on the development of your portfolio

Is this now the best investment available?

No! If you had bought a“Hermès Kelly 28 Sellier Night Blue leather Bag”in 1994 for 5,340 DM and kept it unused and shrink-wrapped, it would have been worth 47,268 € in 2012. 6 years later – in 2018 it already cost €93,750. This corresponds to a total performance of 3,505.7%, i.e. anannual return of 140.228%.😉