Art and business may seem like two completely different worlds, yet in recent years there has been a growing tendency for companies and brands to invest in this sector. Art has always been part of human culture, acting as a means of communication and expression. It is, after all, a language that in ever new forms constitutes contemporary culture. Art allows us to communicate identities and values ​​such as attention to people and personal individuality, inclusiveness, vision. Investing in contemporary art and emerging artists is a way to communicate attention to the evolution of trends in the expressive and therefore social field: it demonstrates the desire and ability to look to the future. When you invest in contemporary art, you invest in the future in terms of contributing to the growth of yourself, your company and the community.

Investing in art, a brand choice

Art and business may seem like two completely different worlds, yet in recent years there has been a growing tendency for companies and brands to invest in this sector. There are several reasons why investing in art is a strategic action. In addition to the purely profitable aspect, whereby the value of works of art tends to increase over time, owning a piece of art can be a great way to improve the image of your company, or your brand, and attract customers interested in art for example; investing in art today can, in this sense, also help build relationships with other companies and brands. Art has become an important factor for business success, it is a way for companies to communicate their prestige, their status. Works of art can be used as branding tools to communicate the values ​​and beliefs of a company. For example, collecting works of emerging artists can be considered a far-sighted and avant-garde choice.

In this article by J'essentia Mag we will delve into why investing in art can pay off both financially and in terms of brand reputation ; we will also evaluate the advantages of investing in emerging artists and understand what it means to invest in digital art.

Investing in Art: How the Market Works

The art market is made up of different players that intercept supply and demand in the collecting panorama and each of these has a different approach to the buying and selling of works of art. Being a complex and constantly evolving market, it is essential that anyone who wants to invest in art has a solid knowledge of the different sales channels. So let's see where to invest in art and what it means to opt for one market rather than another.

Investing in art in the primary market

The primary art market is the initial sale of an artwork, whether by the artist or a dealer representing the artist. This initial price is often used as a guide to the future value of the work. For emerging artists, primary market sales are often the time when art experts begin to predict whether the artist has the potential to become an established, well-known artist and command higher prices.

Investing in Art in the Secondary Market

The secondary market is a vital part of the art world, as it is where artworks can significantly increase in value. This is because investors and collectors aim to make a profit when selling their artworks on the secondary market, whether through an auction house, gallery, or private sale.

Investing in art today

Art has always been part of human culture, acting as a means of communication and expression. It is, after all, a language that in ever new forms, constitutes contemporary culture. Art allows us to communicate identity and values ​​such as attention to people and personal individuality, inclusiveness, vision. Investing in contemporary art and emerging artists is a way to communicate attention to the evolution of trends in the expressive and therefore social field: it demonstrates the desire and ability to look to the future. When you invest in contemporary art, you invest in the future. Speaking of the future, however, it is natural to also take into consideration the most profitable aspect linked to this investment. So, what does it mean to invest in art today and what are the risks?

Knowing the risks of investing in art today

For those looking to invest in art today, it is important to keep in mind that traditional galleries typically form relationships with a small selection of artists, helping them grow their market share and achieve success. While this arrangement can be beneficial for the artist, we must always consider that it can also put the collector at risk. If the artist stops working with the gallery, their market value may decline, limiting the collector's diversification and exposing them to potential losses. In this sense, investing in art today requires due diligence and a thorough understanding of the risks involved.

Invest in art safely today

An alternative that you can consider as an art investor today is to diversify your investment portfolio. Some art advisory firms offer special formulas for investing in art today, creating relationships with prestigious art galleries around the world. This wide network of opportunities offers investors the ability to find the artist and the artwork that best suits their needs and goals.

 

Why is it worth investing in works of art?

In such uncertain times, it can be difficult to choose where to invest your money. However, there are some sectors that are trending for growth and where the investment risk is lower than other financial instruments. One of these is the art market. Why should you invest in art? Thanks to digitalization, art is more accessible than ever and the value of other financial instruments, such as real estate, is currently lower and riskier due to market fluctuations. In contrast, investing in art is considered a safe bet, with the potential to generate significant returns.

Let's look in more detail at some reasons why art can be a profitable and interesting investment.

· The rate of return is high

According to data from Citi Global Art Market, contemporary art has seen a strong increase in revenue over the past two decades and the sector continues to outperform the stock market. Contemporary art offers a high rate of return, making it an attractive option for investors. The sector is also relatively stable and offers consistent returns even in times of economic volatility.

• · It is a guarantee against inflation

• As any investor knows, inflation can be a problem. Over time, inflation can erode the value of monetary assets such as bonds and certificates of deposit. For this reason, many savvy investors look for ways to protect themselves from this and art is a tangible asset that is not subject to inflation. Investors who own art can protect their purchasing power and safeguard their assets from inflation.

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• · Allows you to diversify your investment portfolio
  Art can be a great way to spread risk and minimize exposure to potential losses. Unlike stocks and other financial assets, which tend to be highly cyclical, art can actually provide stability during times of economic uncertainty. Additionally, blue-chip art and art by established artists typically hold their value better than other assets, as Citi’s Global Art Market Report also notes.

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• · Owning a work of art is rewarding

Many people choose to invest in art for the personal gratification that comes from owning a work of art. There is something special about owning a piece of art; when you purchase a piece of art, you are not only acquiring a physical object, but you are also gaining access to the culture and history of the artist. You are purchasing and making the history of the artist and the history of the period in which the painting was created your own. You are also “owning” the future history of the painting, which will continue to be passed down from generation to generation.

• · Offers tax benefits

Investing in art can also offer significant tax advantages. In many countries, in fact, those who invest in art are exempt from paying VAT and capital gains tax. This makes investing in art an excellent way to grow your wealth while minimizing your tax burden.

• · Supporting an artist is a personal satisfaction

There are many reasons why people choose to invest in art, but one of the most rewarding is the joy of supporting an artist. And when you invest in an emerging talent, you also have the added satisfaction of helping to support the career of a young or new artist and being part of their journey of growth and development.

The Benefit of Investing in Emerging Artists

When it comes to investing in art, it is essential to consider not only works by established and blue chip artists, many opportunities arise from investing in emerging artists, who are at the beginning of their careers. Their name in the art world is still being established and their works are usually sold on the primary market through a dealer or by the artist themselves. This can be one of the most interesting categories for investors, as it is possible to get in early, before the artist becomes famous and prices increase. The potential for returns on the investment is very high. With thorough research and wise choices, investing in emerging artists can be a great way to build your art collection and earn significant profits.

Investing in Digital Art: Cryptocurrencies, Metaverse, and NFTs

A new trend is emerging, namely investing in digital art using cryptocurrencies. This new market opens up a world of possibilities for artists, collectors and investors: art consultancies and IT companies are collaborating to enable cryptocurrency payments, thus opening the market to new investors and allowing them to diversify their investment portfolios.

The Metaverse is an exciting new frontier for investing in digital art. Unlike the physical world, where artwork can be bought and sold through traditional channels, the Metaverse offers a new and unique way to invest in art. By investing in art in the Metaverse, you can own a digital asset that can increase in value over time. Additionally, because it is a global marketplace, you can buy and sell art from anywhere in the world. More generally, investing in art NFTs is a form of online art investing that allows you to own a “piece of art” that you can resell or trade in the future.

In an increasingly competitive world, investing in art allows brands and companies to add exclusivity to their positioning and is also a way to give back to the community, to promote beauty and creativity.