Speaker 1: Investing is an art. But did you know that art
Speaker 1: is also an investment and not just any investment but
Speaker 1: a top performing passion investment of 2022 according to a
Speaker 1: long running survey that tracks such things. So what are
Speaker 1: the five things you need to know about investing in art?
Speaker 1: I'm Jonathan Pearce from the Money Mind team and my
Speaker 1: guest today, Guang Zang, founder of Art Agenda, an art
Speaker 1: advisory that specializes in 20th century Asian art and Stephanie
Speaker 1: Gee who's been collecting art for over two decades. She's
Speaker 1: also a wealth manager for ultra high net worth clients. Now,
Speaker 1: according to the annual night, Frank Luxury Investment Index, art
Speaker 1: was the top performing luxury asset providing a return of 29%
Speaker 1: last year.
Speaker 1: That means it did a lot better than mainstream investments
Speaker 1: like equities and gold. In 2022 we also recently had
Speaker 1: Southeast Asia's biggest art fair here in Singapore. So guys
Speaker 1: can we say the art world is back in business
Speaker 1: after the pandemic? Stephanie,
Speaker 2: the art market actually has been growing and we noticed
Speaker 2: through a recent survey done by um Art Basel together
Speaker 2: with U BS, right? They published a report which showed
Speaker 2: that during COVID, right, actually spending on art has more
Speaker 2: than doubled. So we're talking about the period from 2019
Speaker 2: to 2020
Speaker 2: two is growing as an interest in Singapore. We're seeing
Speaker 2: more and more collectors typically as a country matures at
Speaker 2: the beginning of uh collecting journey, people tend to support
Speaker 2: artists in their own countries. But as they travel more
Speaker 2: and they learn more and they get more exposed, right?
Speaker 2: They start collecting artists from other countries. They expand beyond
Speaker 2: just a painting or a culture and going to potentially
Speaker 2: other mediums.
Speaker 2: I see more and more people are gaining interest. I
Speaker 2: can just see just from my own uh co-workers. They
Speaker 2: are starting their art journey in art fairs such as
Speaker 2: affordable art fairs. So there's a growing awareness that you
Speaker 2: don't have to just have a wall that is done
Speaker 2: by your ID. You can actually put a real piece
Speaker 2: of work on the wall and that is a good
Speaker 2: sign for art markets for years to come.
Speaker 2: Art fairs and exhibitions which are traditionally a Barra meter
Speaker 2: for market activities. The state of the market, these are
Speaker 2: all back in full swing. The global art work calendar
Speaker 2: in 2023 is looking as pack as pre pandemic times now.
Speaker 2: But numbers haven't exactly dropped during the pandemic though, you know,
Speaker 2: in person events like exhibition openings, option previews back then
Speaker 2: during the
Speaker 2: pandemic stop or they took place in very curtail formats.
Speaker 2: I say numbers haven't dropped because really during the pandemic,
Speaker 2: we saw still very passionate interest in acquiring art. People
Speaker 2: were still collecting and we saw actually the onset of
Speaker 2: people accepting to, to acquire over digital format online. And
Speaker 2: I would say when it comes to traditional art forms,
Speaker 2: things that in general one needs to see in person, right?
Speaker 2: Art forms that are better appreciated in person, the hunger
Speaker 2: and the desire to see this uh material hasn't really
Speaker 2: subsided at all during the pandemic. I mean, art holds
Speaker 2: up well, if anything has
Speaker 2: has grown, is this kind of desire to see these
Speaker 2: things physically and during the period of the pandemic, the
Speaker 2: absence of encountering these physical art that was very real.
Speaker 2: But now things have come back, the range of activities
Speaker 2: has returned with the pandemic. People couldn't really travel. So
Speaker 2: there was a more disposable income and more time at
Speaker 2: hand because you get less distraction.
Speaker 2: So the collectors actually had more time to look at
Speaker 2: what art is out there and what's being produced. But
Speaker 2: on the other hand, it has also handicap travel visits
Speaker 2: to art fairs, art galleries or also practically non-existent, right?
Speaker 2: So it's actually fuel the growth of online um buying
Speaker 2: of art.
Speaker 2: That's what we observed. Uh personally, I prefer to see
Speaker 2: the art pieces. Unless I'm familiar with the artist, then
Speaker 2: I'm comfortable to just buy from a catalog or a
Speaker 2: PDF right? But most people still like to see art
Speaker 2: in person. That's what um we've noticed also from a
Speaker 2: lot of surveys that have been published on art.
Speaker 1: Now, what kind of advice would the two of you
Speaker 1: give to someone who is interested in collecting art? Where
Speaker 1: should one begin
Speaker 2: and the journey as an art collector? If you're just
Speaker 2: starting out,
Speaker 2: you need to do some research, right? Speak to people.
Speaker 2: We have been collecting for a while and be mindful
Speaker 2: that their taste may not be the same as yours visit.
Speaker 2: Art galleries, go to museums, art fairs, expand your perspective
Speaker 2: and look at more artworks before you commit. And just
Speaker 2: keep in mind if you're buying a piece of art,
Speaker 2: you have to love it, it might be worthless 10
Speaker 2: years from now and that piece of work is still
Speaker 2: in your house. So just do it out of fashion
Speaker 2: rather than for financial consideration.
Speaker 2: And if you're going to start your journey first, try
Speaker 2: to understand yourself what appeals to you rather than what
Speaker 2: appeals to your friends. I made that mistake myself and
Speaker 2: I was influenced by more experienced collectors, but you grow
Speaker 2: into your own with time consider also how much money
Speaker 2: you're willing to spend
Speaker 2: and assume that you're not going to get any return
Speaker 2: aside from emotional returns, right? Art does not pay dividends.
Speaker 2: So the dividend is your happiness when you see the
Speaker 2: piece of artwork. So my advice is buy what you
Speaker 2: love
Speaker 2: and appeals to you. And a little tip here try
Speaker 2: not to buy on impulse. I have now imposed a
Speaker 2: little rule on myself and I see something I like.
Speaker 2: I sleep on it for two days if I still
Speaker 2: want it after two days. Ok, I can go and
Speaker 2: seriously consider buying. I would say one should dive straight in,
Speaker 2: you know,
Speaker 2: set aside a certain small budget to be an active
Speaker 2: player in the market, participate in it properly, buy, sell
Speaker 2: and probably make some mistakes along the way. And all
Speaker 2: of that's inevitable at times. The thing about art collecting
Speaker 2: is that it is also about the cultivation of personal
Speaker 2: taste and knowledge. And one lesser discussed aspect of art
Speaker 2: collecting is how it brings about awareness of oneself.
Speaker 2: And the best art collections can really reflect and align
Speaker 2: one's uh beliefs and orientation
Speaker 2: as strange or as old fashioned as it sounds. When
Speaker 2: you think about art collecting, one should really begin from
Speaker 2: within knowing what one wants, makes the process of looking
Speaker 2: for art much more focused and more meaningful.
Speaker 1: So, art collecting is a passion and it's deeply personal.
Speaker 1: But can a hobby become something that can be monetized?
Speaker 1: And how do you know when an artwork is something
Speaker 1: worth investing in?
Speaker 2: You need to do a lot of research, read, talk
Speaker 2: to galleries, talk to art collectors, more seasoned art collectors,
Speaker 2: talk to the art advisor. Now there's the growing market.
Speaker 2: And there's a lot of art advisor that can give
Speaker 2: you a more informed opinion on what they think may
Speaker 2: be good in the future. But again, a gentle reminder, right,
Speaker 2: art pieces are all unique. So even if your artists
Speaker 2: price goes up in the auctions, it doesn't mean every
Speaker 2: single art work done by the artist goes up in value.
Speaker 2: It would be really about trying to get a complete
Speaker 2: set of information about the work that one is uh
Speaker 2: contemplating to acquire in any sort of circumstances where there
Speaker 2: are pressure of time to make a decision, pressure from
Speaker 2: the other end of the table to close a transaction.
Speaker 2: Sometimes it doesn't allow you to acquire all the information
Speaker 2: that's necessary.
Speaker 2: So I would advise that one takes the time as
Speaker 2: much as you can in the acquisition process. Because really
Speaker 2: if you think about it, the only person who wants
Speaker 2: you and needs you to hurry is the person across
Speaker 2: the table selling something to you. But as a buyer,
Speaker 2: as someone collecting,
Speaker 2: you wanna equip yourself with a complete information and appreciate
Speaker 2: all the complexities of, of the work of art, get
Speaker 2: its context right before you acquire. And this way, the
Speaker 2: enjoyment of the work is heightened, I would say
Speaker 2: and yeah, I, I won't, you know, for instance, worry
Speaker 2: about missing out any artwork because again, uh taking a
Speaker 2: a larger perspective on things in the contemporary art world,
Speaker 2: the amount of art that exists today will definitely be less,
Speaker 2: less than the amount of art that exists tomorrow. In
Speaker 2: the contemporary art world, art is being generated and produced
Speaker 2: every day and there will always be choices.
Speaker 2: So it is more important that we secure for ourselves,
Speaker 2: that kind of space to be able to think holistically
Speaker 2: about the acquisition of the world and make it a
Speaker 2: much more of a considered exercise.
Speaker 1: So here are some practical tips. If you're looking to
Speaker 1: buy art, know what you want, do your research and
Speaker 1: take your time, like any asset prices can go in
Speaker 1: either direction. Just because a work of art by an
Speaker 1: artist fetches a high price at one auction doesn't mean
Speaker 1: that the price of all their works will go up
Speaker 1: as well. Investing in art does come with risks. So
Speaker 1: season collectors say you should start small and assume that
Speaker 1: you only get emotional returns.
Speaker 1: Now let's talk about those risks. You mentioned the need
Speaker 1: to do your homework. But how easy is it to
Speaker 1: get information about valuations? And how do you know what's
Speaker 1: a reasonable price to pay for an artwork?
Speaker 2: We often think about the art market uh and our
Speaker 2: market information as essentially compilation and analysis of sales uh figures,
Speaker 2: sales data.
Speaker 2: It's not wrong to think about it that way. Uh
Speaker 2: because obviously markets have to be defined uh by their size.
Speaker 2: But when it comes to the art market, there's a
Speaker 2: lot of transaction that's being handled privately. And to be
Speaker 2: perfectly clear evaluation is rather difficult to obtain in a
Speaker 2: less than entirely transparent art market. The value of an
Speaker 2: artwork is really determined very much by comparison with sales
Speaker 2: figures that exist. But
Speaker 2: when it comes to the market with a lot of
Speaker 2: transactions being done privately, this kind of data is often
Speaker 2: times not so accessible and sometimes not entirely reliable as well,
Speaker 2: even if one obtains them. So it's important to, to
Speaker 2: be talking to people in the know and be prepared
Speaker 2: at times to pay a little and to go out
Speaker 2: of your way to get impartial research information,
Speaker 2: other types of assets, invest or investment vehicles, the traditional
Speaker 2: stocks and bonds, right? There is a market, there's an exchange.
Speaker 2: So it is transparent. Art is not so transparent because
Speaker 2: there are many sales channels you can buy directly from
Speaker 2: the artists, the art galleries, there's a primary market you
Speaker 2: can buy from secondary markets through auctions or uh other channels.
Speaker 2: And there's no published index to say this particular artist's
Speaker 2: work is at what price right now? Because every single
Speaker 2: work is unique as a store of value. I find
Speaker 2: it more as an emotional value than financial value. If
Speaker 2: you buy a piece of art and the value goes
Speaker 2: up double 10 years down the road, you congratulate yourself
Speaker 2: for having made a good investment.
Speaker 2: But to me, it's more an emotional journey,
Speaker 1: other than the cost of acquisition. Just like many other assets.
Speaker 1: There is the cost of ongoing maintenance as well. How
Speaker 1: would you advise prospective collectors to prepare for
Speaker 2: this? A lot of categories of art and related categories
Speaker 2: like design, collectables. What really sets these assets
Speaker 2: apart from other investment class or different assets class would
Speaker 2: be the physicality of the object? When we think about
Speaker 2: something physical, we do need to think about maintenance and
Speaker 2: good upkeeping of these physical things. The first thing is
Speaker 2: really being aware that it is physical and that we
Speaker 2: need to therefore maintain it.
Speaker 2: And when we think about maintenance of an art work,
Speaker 2: I would think of it in the same way that
Speaker 2: we think of our physical bodies, we take care of
Speaker 2: ourselves with exercise. Some people with health supplements, we go
Speaker 2: for our checkups at the doctors and as funny as sounds,
Speaker 2: it's really the same with, with artworks. Occasionally you want
Speaker 2: to get your galleries or your dealer or friend who's
Speaker 2: knowledgeable about the art
Speaker 2: to come and have a look at it. In my
Speaker 2: course of work, I discover a lot of cases where
Speaker 2: an artwork is hanging there on the wall. People do
Speaker 2: take it for granted because it becomes part of something familiar.
Speaker 2: But things can happen in a very low key insidious
Speaker 2: way to an artwork just hung on the wall. If
Speaker 2: one doesn't take notice and take care and artwork can
Speaker 2: suffer irreparable damage. In the worst case scenario, if it
Speaker 2: isn't taken good
Speaker 2: care of, for instance, more is a big issue in
Speaker 2: our part of the world. With the relatively higher humidity
Speaker 2: in the environments that we display our art. Sometimes the
Speaker 2: most intelligent of my clients and they are generous as well.
Speaker 2: They would ask me out for lunch or dinner at
Speaker 2: their place. I play the role of a doctor for them.
Speaker 2: I just have a quick look at the artworks. If
Speaker 2: anything is up with them, we can get it addressed
Speaker 2: as soon as possible
Speaker 2: to new collectors who are looking to venture into the
Speaker 2: art market. Just remember, there's a lot of costs involved.
Speaker 2: We're talking about not just actually buying the artwork, the
Speaker 2: storage and if you're buying from a different country, you
Speaker 2: have to insure the shipping, you got to maintain your artwork.
Speaker 2: If you're buying works on paper, they can get moldy
Speaker 2: in our climate, even sculptures. If it's bronze, depends on
Speaker 2: whether it's treated or not, right. It might also change color,
Speaker 2: the material might change colors might fade.
Speaker 2: So there's actually a lot of risks involved. So when
Speaker 2: you go in, go in with your eyes open and
Speaker 2: buy what you like and what you love. You never
Speaker 2: can go wrong there.
Speaker 2: I once bought a piece of artwork from a secondary
Speaker 2: market to an auction in Hong Kong that you happily
Speaker 2: bid for the piece. You think that's what you're paying
Speaker 2: for but you still have to pay your buyers commission
Speaker 2: to the auction house, right? That can easily be um
Speaker 2: 30 35% these days, right? On top of that, you
Speaker 2: still have to pay for your shipping, your insurance, the
Speaker 2: creating
Speaker 2: and the G S T when everything arrives in Singapore.
Speaker 2: So when it arrives in Singapore, you still have to
Speaker 2: arrange for somebody to come to your home, to arrange
Speaker 2: art piece, to hang it on the wall. If it's
Speaker 2: a sculpture, you have to pay someone to make a custom,
Speaker 2: make a pedestal for you. So all those costs adds up,
Speaker 2: which I think sometimes people underestimate the cost of refurbishing
Speaker 2: could be in the hundreds of thousands depending on the
Speaker 2: artwork and how big the piece is.
Speaker 2: And also even the simple thing when you buy a painting,
Speaker 2: sometimes it comes without a frame, you got to frame
Speaker 2: it up.
Speaker 2: Then you have to consider, do you want to frame
Speaker 2: it with, you know, museum quality frames? Make sure there's,
Speaker 2: there's no air in there is vacuum type of framing.
Speaker 2: And then do you want to put your air conditioner on,
Speaker 2: on the 24 7? Personally, I find oil paintings probably
Speaker 2: the easiest or acrylic. You don't really have to do much,
Speaker 2: you just hang it there, but paperworks, unfortunately not so
Speaker 2: good for our climate.
Speaker 1: Now, we've been talking about the upkeep cost of physical
Speaker 1: works of art, but of course, the
Speaker 1: if not all art works are now physical. Can you
Speaker 1: tell us a bit about art in the digital realm? Yes,
Speaker 2: we are really increasingly living out our lives in the
Speaker 2: digital sphere. A great deal of uh art that's emerging
Speaker 2: as a digital uh elements to the N F T.
Speaker 2: Art has been a very big new category to emerge
Speaker 2: in the past past uh few years. Uh And it's
Speaker 2: essentially a 21st century phenomenon
Speaker 2: in the world of art collecting has spawned a whole
Speaker 2: new category because it ties in very well with our
Speaker 2: increasingly mobile digital lives. Yeah, so not all art books
Speaker 2: are indeed uh physical um but by and large uh
Speaker 2: whatever is classical, doesn't really go out of fashion. So
Speaker 2: your in that sense, your typical pictures, uh flat art
Speaker 2: on the wall that always has a place at the
Speaker 2: end of the day, I do think a great deal
Speaker 2: of people still think of art collecting in the most
Speaker 2: conventional way, keeping physical works. But and then it requires
Speaker 2: as we've talked about earlier, that kind of physical maintenance,
Speaker 2: the old money still tend to prefer the masters. But
Speaker 2: increasingly collectors are supporting contemporary artists in particular living artists
Speaker 2: because it's a reflection of the times we're in and
Speaker 2: also reflects the culture, political landscape.
Speaker 2: So contemporary art tends to be more of the focus
Speaker 2: these days rather than traditional old masters. Younger collectors are
Speaker 2: also looking at contemporary art, younger collectors, some of my clients, Children. Yes.
Speaker 2: Uh You know, we all know who the old masters are,
Speaker 2: but they are not interested in that. They are the
Speaker 2: ones that will go to contemporary art fairs. So the
Speaker 2: Arts Street is a contemporary art fair. Collectors also like
Speaker 2: to get to know the artist and you journey with
Speaker 2: them as they get older and move on to different mediums.
Speaker 2: So yeah,
Speaker 2: younger collectors tend to prefer contemporary artists.
Speaker 1: So how do you identify a good investment piece?
Speaker 2: A few years ago, I did my masters and my
Speaker 2: thesis was whether contemporary art is a good investment. And
Speaker 2: that's my personal thesis. And my conclusion in short was
Speaker 2: to go into an art and viewing it as an
Speaker 2: investment is very high risk. And unless you have a
Speaker 2: lot of resources at your disposal, I really would not
Speaker 2: advise looking at it as, as an investment,
Speaker 2: looking at past records. I think the easiest the most
Speaker 2: accessible medium for collectors in general will be paintings that's
Speaker 2: still traditional. You go to museums, you still see a
Speaker 2: lot of paintings, sculptures is another traditional medium which is
Speaker 2: still highly collectable and digital art is something that I
Speaker 2: find very interesting, but I haven't ventured personally, but that
Speaker 2: is also growing in importance. So one reference
Speaker 2: financial collectors could look at is what's happening in the
Speaker 2: secondary market and what are the art pieces that are
Speaker 2: exchanging hands and setting a benchmark there? I think that's
Speaker 2: the best you can get in the art world to
Speaker 2: look at secondary prices. I would really turn the question
Speaker 2: around and think of a good investment piece as an
Speaker 2: artwork that fits along with one's determined direct
Speaker 2: in collecting art. We do talk about art collecting as
Speaker 2: a kind of discovery of oneself and the collection as
Speaker 2: a reflection of your beliefs, your philosophy, many times, conventionally,
Speaker 2: people think of art collecting as trophy gathering, the most
Speaker 2: desirable things of the present, what other people are collecting.
Speaker 2: We may want to acquire the same, but it
Speaker 2: can be quite risky sometimes because trophies and the value
Speaker 2: that people scribe to these trophies do change over time,
Speaker 2: maybe not in the short term, but definitely categories rise
Speaker 2: in popularity and they wane in popularity. So a very
Speaker 2: sought after artwork from perhaps half a century ago, it
Speaker 2: might not have value that it was yesterday today. It
Speaker 2: might be more, it might be less.
Speaker 2: So when we think about investing, we are thinking about
Speaker 2: alignment with our own beliefs. Art collecting is a nearly
Speaker 2: as creative and exercise as you know, the art that
Speaker 2: one collects. You can pin a lot of different agendas
Speaker 2: onto art collecting. Do you maybe you know want to
Speaker 2: collect and support uh emerging young artists from your generation?
Speaker 2: A lot of people do, do you have a
Speaker 2: particular cost? A lot of art reflects a certain political cause?
Speaker 2: Certain social cost is really very fulfilling to collect in
Speaker 2: this way when an art collection bears a certain attitude
Speaker 2: or reflect certain ideas. And it's very tight. The overall
Speaker 2: value of the collection can can enhance the art historical
Speaker 2: and probably financial value of single respective works in the collection.
Speaker 1: So we've been talking about the five things you need
Speaker 1: to know about investing in art. As with all other investments,
Speaker 1: you need to do your research before committing your cash.
Speaker 1: This is especially important as market information about art is
Speaker 1: not always accessible or transparent. So start small commit to
Speaker 1: a budget and take your time to make your decision
Speaker 1: for physical artworks, don't underestimate the cost of installation and maintenance.
Speaker 1: And while prices can go up, our experts say the
Speaker 1: priority should be an emotional rather than a financial return.
Speaker 1: I've been speaking to Wan Zang, founder of art agenda
Speaker 1: and veteran art collector Stephanie G catch Money Mind on
Speaker 1: C N A and online at me, watch C N
Speaker 1: A dot Asia and youtube.