Art collectors or investors, passion or pure investment?

October 27, 2019

Photo via David Harex

Why an artwork is bought or a specific artist is collected has always been an intriguing question for both artists and those who buy and or sell their artworks. There are plenty of thoughts and writings about it. Regardless of the times, the underlying reasons stay the same: moved by passion, emotions, gut feeling, taste or with an expectation that the artwork will be revalued some time in the future.

The art world is a mix of many players, depending and supporting each other. Artists have always relied on some kind of supporting system, whether they were patrons, kings and queens in the past, influential people, philanthropists or sponsoring business entities and state funds in our modern times. One of the main supporters, backbones of artists are those who collect their artworks. They are those who seek out artworks and artists, who follow them and who buy their art in advance and often periodically from the same artist.

There are many types of art collectors and many ways to characterize them according to various factors. Finding our way through the different art collector types, one can easily get lost. However looking at it from the broadest spectrum, one can define three general types of differences between them.

The purely art collectors, the art investors and finally the art lovers. They all are seeking different exchanges from the art world and market, and in the meantime they complement each other.

What differentiates all those who “buy” artworks is also the market where they mainly buy them, whether it is the primary or the secondary one.

The primary market, linked to the artist who creates, the first piece of chain, is all about the excitement, the passion and the aim to find something unique and different. Meanwhile, the secondary market represents the liability and stability to make a savvy investment besides the excitement factor.

Those who consider art as pure investment mainly deal with blue chip artworks, a mix of old masters and purely established contemporary artists. They consider art as an asset in their diversified investment portfolio.

Art collectors move on a wide spectrum from pure financial investment to passion, respectively at each end, depending on their intentions, interests, plans. Most of them are active in both the primary and the secondary market.

This means that they are open to buy from and follow emerging contemporary artists, and that they accept risks since they might be also looking for higher returns on the artworks. They are the ones who are able to secure the successful rise of an emerging artist.

The primary market offers a sort of fascination since the artworks usually come straight from the artist’s studio. They have never been seen before in public and they are able to pump up the adrenaline level within all the passion-oriented people. The key factor with this type of art collection is the artist and the market demand for his or her artworks.

One of the main attractive powers of the primary market is the price of the artworks, since they are usually less than those obtained at an auction on the secondary market. This is a great tool for galleries and art representatives who are working directly with the artists to sell their artworks quickly at any time of the year.

Read further our exclusive article on art collecting and art investment in the 2nd Issue of the Secrets of Art Magazine.