PDF Summary:How to Collect Art, by Magnus Resch

Navigating the opaque and subjective art market can be overwhelming, but How to Collect Art by Magnus Resch offers practical guidance. The book delves into the intricate ecosystem of participants, from artists and galleries to collectors and auctions houses, shedding light on their interconnected roles and influences.

Resch debunks common misconceptions around art as a lucrative investment vehicle and provides strategies for assessing an artwork's potential value through the artist's trajectory, exhibition history, and market demand. With frameworks for budgeting and selecting artists based on your goals, this guide aims to help both novice and experienced collectors build meaningful collections with confidence.

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Context

• Art is not easily converted into cash compared to other assets like stocks or bonds. Selling art can take time, as it often requires finding the right buyer willing to pay the desired price.
• Artists whose work has a significant cultural or social impact may see more stable or increasing values over time.
• The art market is segmented into primary and secondary markets. The primary market involves direct sales from artists or galleries, while the secondary market includes resales at auctions, which are more visible and often used for performance comparisons.
• Liquidity in the art market refers to how easily artworks can be bought and sold without affecting their price. Works by renowned artists are more liquid because they have a broader base of potential buyers and established market value.

Understanding the factors that can affect the financial value of an artwork is crucial for making educated choices when adding to a collection.

The potential of an artwork to appreciate in value can be assessed by looking at the artist's career trajectory, their relationships with art galleries, their exhibition history, and the performance of their pieces in auction sales.

Resch details the multiple elements to evaluate when choosing artworks that have the potential for investment. Determining which gallery advocates for an artist is crucial, as this association with esteemed galleries cements the artist's standing in the market. Examine the trajectory of the artist's professional life diligently, taking note of the quality of the venues where their work has been displayed, and assess if they have had important individual exhibitions or been part of group shows that might be less notable. The author's research underscores how the professional path of an artist is significantly influenced by the reputation of the institutions that display their artwork. The first five to ten exhibitions are crucial in establishing the trajectory of an artist's professional path, with each additional show having a diminishing influence as time progresses. Understanding the importance of the environment where art is displayed, another factor to consider is the method by which collectors and museums acquire artists' creations, as inclusion in prestigious collections and visibility in exhibitions boosts the reputation of the artists and elevates the economic value of their art.

Practical Tips

• Set up Google Alerts for artists you're interested in to stay informed about their latest exhibitions and mentions in the art world. This way, you'll receive real-time updates whenever the artist is featured in a new show or receives media attention, which can be indicators of growing prestige and potential value appreciation. For instance, if you're following an emerging artist, you might get an alert about their first solo exhibition at a notable gallery, signaling a potential increase in their artwork's value.
• Create a spreadsheet to track interactions with gallery owners and representatives. Note down the date of contact, the nature of the conversation, any feedback received, and follow-up dates. This will help you understand which galleries are more responsive and supportive, indicating a potential good fit for advocacy.
• Conduct biannual self-reviews to evaluate your professional development. Set aside time every six months to reflect on your skills, projects, and network. Write down what new skills you've acquired, what projects you've completed, and how your professional network has changed. This self-assessment can highlight areas for improvement and opportunities for further growth.
• Develop a venue quality checklist for personal use when considering where to display work. List factors such as lighting, space, foot traffic, curatorial reputation, and past exhibitions. Before agreeing to show your work, visit potential venues and use your checklist to evaluate if they meet your standards. This ensures you're consistently aligning with spaces that reflect the quality of your work.
• You can create a visual art diary to track and reflect on exhibitions you visit. Start by attending local art shows, whether they're individual exhibitions or group shows, and document your experiences. Take notes on the artists, the themes, the techniques used, and how the work makes you feel. This practice will not only enhance your appreciation for art but also help you understand the significance of exhibitions in an artist's career.
• Create a portfolio website showcasing your early works and exhibitions to establish an online presence. By doing this, you can reach a wider audience beyond your initial exhibitions. Include high-quality images of your artwork, descriptions of your creative process, and any positive feedback or reviews you've received. This digital footprint can serve as a permanent record of your early career milestones.
• Track your entertainment consumption and set a limit on similar content to avoid saturation. Start by noting down every show or movie you watch over a week. Then, identify patterns in genres or themes and set a personal rule to not watch more than two similar shows in a row. This can help maintain your interest and prevent the feeling of content becoming less impactful.
• Create a rotating art display in your home or office to keep the environment dynamic and engaging. Select a few pieces of art and change them out on a regular basis, such as monthly or seasonally. This not only refreshes the space but also allows you to experience and appreciate each piece more deeply over time. You can use simple shelving units or picture ledges for easy swapping.
• Start a virtual art-sharing community to connect with fellow enthusiasts and discover how art is traded and valued. By creating a social media group or an online forum, you can invite artists, collectors, and art lovers to share their experiences and insights on acquiring art. This can give you a real-world understanding of the dynamics in art collection without needing to be an expert or collector yourself.
• Partner with local businesses to display your art in their spaces. Reach out to coffee shops, restaurants, libraries, or offices that are open to featuring local artists' work. This not only provides you with a physical space to exhibit your art but also exposes your work to a broader audience who might not typically visit galleries.

Determining if an artwork's worth will rise requires a thorough analysis of market movements, pricing variances, and the artist's competitive environment.

Before acquiring any piece of art, Resch advises collectors to thoroughly examine the market. He advises investigating the history of sales for your chosen artist's works, including the frequency with which a particular piece has been offered for sale and the duration between its initial sale and subsequent offerings. The likelihood of obtaining a financial gain increases when the works of an artist have been sold at least five times in the preceding two years, indicating a positive trend in the market. Magnus Resch advises collectors to carefully examine the disparity between the auction's preliminary valuation and the ultimate sale amount. The allure of the art market wanes when the prices realized for artworks regularly fall short of their initial estimates. For artists who have already made a name for themselves, he advises collectors to be vigilant about recent developments, like their inclusion in museum collections and showcases, as these favorable events frequently result in a rise in their market worth.

Context

• The competitive environment includes the presence of other artists in the same genre or style, the level of innovation in the artist's work, and their standing relative to peers. This can affect an artist's market position and potential for appreciation.
• The duration between sales can reflect the investment potential of an artwork. Shorter intervals might suggest a quick turnover, while longer intervals could indicate a more stable, long-term investment.
• Large disparities between estimates and sale prices can signal volatility. This might suggest speculative interest or fluctuating market conditions, which can impact investment decisions.
• Consistently low sale prices can erode confidence among collectors and investors, leading to reduced participation in future auctions and a potential decline in overall market activity.
• Participation in high-profile showcases often provides artists with networking opportunities, leading to collaborations and further exhibitions, which can enhance their market profile.

Exploring the realm of art collection: strategies, structures, and instruments.

Understanding one's own motivations and goals is crucial for success in the world of collecting art.

Art collectors gather pieces for a multitude of reasons, including a passion for aesthetic appeal, the aspiration to enhance their social status, the potential for economic profit, and a commitment to significantly support the creators behind the artworks.

Resch provides advice to art acquisition novices, emphasizing the importance of reflecting on their motivations for venturing into the realm of art dealings. Some individuals acquire artwork merely to adorn the empty spaces on their walls. Numerous individuals are motivated by a deep respect for the artistic endeavor and the aspiration to back artists during their career progression. Many people are looking to channel their money into an asset they hope will generate significant profits. The author classifies art collectors into five unique categories—those who purchase just one piece, passionate enthusiasts, profit-seekers, collectors who double as dealers, and institutions that amass art—and meticulously analyzes their characteristics, citing the Mugrabi family, Adrian Cheng, and Mera and Don Rubell as prime examples for each category. Throughout his book, the author underscores that the most untapped market segment consists not of existing collectors but of a substantial and often overlooked group—newcomers—who, despite their enthusiasm, often feel overwhelmed by the plethora of choices and struggle to identify art that truly speaks to them on a personal level.

Practical Tips

• Create a visual motivation board that represents your art aspirations. Use magazine cutouts, drawings, or printed images to make a collage that reflects what you hope to achieve or experience in the art world. Place it somewhere you'll see it daily as a reminder of your personal reasons for exploring art, which can range from connecting with a community to personal growth.
• Use augmented reality (AR) apps to visualize how different artworks would look on your walls before buying. Many smartphones now support AR, and by using these apps, you can see a digital version of the artwork in your space. This helps you make more informed decisions about what will complement your home's aesthetic and ensures the size and colors fit well with your existing decor.
• You can create a monthly budget specifically for supporting artists by setting aside a portion of your discretionary income. Determine a set amount or percentage of your income that you're comfortable with dedicating to art each month. This could involve purchasing artwork, funding a Patreon subscription for an artist, or buying tickets to local art shows. By doing this, you're directly contributing to the livelihood of artists and showing respect for their work.
• You can identify your art collecting profile by tracking your purchase habits over six months. Create a simple spreadsheet where you log each art purchase, noting the motivation behind the buy (aesthetic appreciation, investment, a mix of both, etc.), the frequency of your purchases, and whether you've sold any pieces. This will help you see which category you most align with and can guide future art acquisitions.

Developing a harmonious and fulfilling collection necessitates the alignment of one's collecting objectives with suitable methods and resources.

Resch provides a variety of strategies to help both novice and experienced art enthusiasts navigate the extensive selection of artworks available for purchase. Newcomers to art collecting should broaden their assemblage by including works that represent a diverse array of artistic styles, techniques, artistic movements, and eras. The writer underscores the significance of cultivating an appreciation for your own taste in art, a clarity that emerges over time and with contemplation following your initial acquisition of artwork. By sharpening your concentration, you are then able to formulate your approach. The writer advises that when making your first art purchase, you should cap your budget at a maximum of $1,000, as this figure is typically associated with beginner investments and poses a low financial risk. To enhance your understanding and enjoyment of your own taste, you might concentrate your collection on the works of a single artist or a select few, requiring a deeper insight into the art market's nuanced intricacies.

Practical Tips

• Engage in a 'blind selection' exercise where you choose artworks based on their descriptions or stories without seeing them first. This can be done by having someone else describe an artwork or reading the artist's statement without viewing the piece. This strategy encourages you to focus on the narrative and conceptual elements of art, which can be just as important as the visual aspect when selecting art that resonates with you.
• Try a 'focus sprint' technique where you work on a task for a short, uninterrupted period, followed by a brief break. Start with 25 minutes of focused work and a 5-minute break, then adjust the intervals to find what best suits your concentration patterns. During the focus sprint, all distractions should be eliminated, and during the break, engage in a completely different activity to refresh your mind.
• Create a visual board, either digitally or physically, that represents the type of art you're interested in within the $1,000 budget. This board can include images, expected prices, and artists' names. It serves as a focused inspiration and a guide to what you're looking for, making your search more targeted and efficient when you're ready to purchase.

Art collectors employ a variety of tools and systematic methods to ensure their decisions are informed by reliable data within the realm of art trading.

The Budgeting Framework provides structured approaches for evaluating artists, taking into account their market standing and future investment prospects.

Resch developed a pair of strategies to assist collectors in pinpointing the appropriate artist. The realm of artistry consists of both the creators and the marketplaces for buying and selling their creations. Every category possesses distinct classifications. Artists fall into various categories such as the highly acclaimed, established professionals, and those new to the art world, in addition to individuals who have made a name for themselves in the commercial domain, those who pursue unique creative expressions, and those motivated by a profound passion for their work. Art marketplaces are categorized into four specific types of galleries: alpha, beta, gamma, and delta, which also includes the realms of art fairs, auctions, and advisors. The diagram demonstrates the particular frameworks that dictate market operations. A well-regarded gallery frequently showcases pieces by renowned artists, participates in major art fairs, and facilitates transactions via leading auction platforms. An artist fueled by their fervor might display their creations in venues that are unconventional, or may choose not to present them in a traditional gallery setting. The categorization and logic are uniformly applied across diverse platforms. The method improves your understanding of market dynamics, particularly in evaluating the worth of pricing.

The Budget Framework, akin to the Artist Framework, focuses on the financial approach and its associated pricing range, emphasizing the possibility for investment over the classification of the artist. The structure consists of six pillars, beginning with an exploration of your purchasing choices. The first two columns correlate fiscal limitations with different types of artists and their respective galleries, whereas the following two columns categorize various levels of pricing and the prospects for investment. The model indicates that there are investment opportunities available at even modest price points. An individual with a $5,000 budget for art collection can discover up-and-coming artists whose works have transitioned from being showcased in obscure locations to being presented in esteemed galleries.

Other Perspectives

• The strategies could perpetuate the dominance of certain galleries and artists, reinforcing existing power structures within the art world rather than encouraging diversity and discovery.
• The term "realm of artistry" could be seen as too narrow if it only includes the transactional aspect of art, as it does not account for the broader ecosystem that supports and influences the creation and reception of art.
• The categorization might not account for the fluidity of an artist's career; artists can evolve from one category to another, or their market standing can change rapidly due to various factors outside of their control.
• By focusing on galleries, art fairs, auctions, and advisors, the framework may overlook the importance of direct artist-to-consumer sales, which have become more prevalent and may not require traditional gallery representation.
• There is a risk that art displayed in unconventional venues may not be taken as seriously by the art community, which could impact the artist's reputation.
• The concept of uniformity assumes a level of objectivity that may not exist in the art world, where personal relationships, branding, and reputation can significantly impact market operations and artist categorization.
• Understanding market dynamics involves more than evaluating pricing worth; it also requires insight into cultural trends, collector behaviors, and economic conditions, which may not be fully addressed by the method.
• The Budget Framework may oversimplify the complexity of art investment by focusing primarily on financial aspects and pricing range, potentially neglecting other critical factors such as artistic merit, historical significance, and cultural impact.
• The model may not be flexible enough to adapt to the rapidly changing trends and valuations within the art market, which can be influenced by a wide array of unpredictable factors beyond fiscal constraints and gallery types.
• Investment opportunities at modest price points might carry higher risk, as emerging artists and their markets can be more volatile and less predictable than those of established artists.
• Discovering up-and-coming artists requires not just budget but also expertise and time to research and identify potential, which may not be feasible for every collector.

Leveraging online resources that provide comprehensive insights into art sales, auction results, and the attributes of art galleries can guide collectors towards informed decisions in their art acquisitions.

The author suggests a number of readily available resources that new collectors can use to navigate the market. Individuals looking for expert analysis and information on the visual arts industry often turn to platforms such as Artnet News and Artsy, which offer brief reports on subjects including auction results, legal conflicts, artist contracts, and current conversations within the art world. These provide a great overview of what’s trending. The See/Saw and Artsy applications are commended for offering a user-friendly portal to details about current exhibitions and events in major cities, aiding those without pre-existing networks in these regions. Individuals keen on exploring valuations have the option to use platforms such as Artnet, LiveArt, and Artsy, which are among the foremost resources for examining historical auction outcomes for artists, contrasting comparable works, and investigating upcoming auction entries.

Other Perspectives

• There is a risk of information overload for new collectors who might find the vast amount of data and analysis available online overwhelming or difficult to interpret without proper guidance.
• The brevity of reports on platforms like Artnet News and Artsy could potentially lead to oversimplification of issues, which might not be sufficient for those seeking in-depth analysis or scholarly research.
• The user experience and the quality of information can vary greatly depending on the app's design and functionality, which might affect the usefulness of the information provided about exhibitions and events.
• While platforms like Artnet, LiveArt, and Artsy provide historical auction data, they may not always offer a complete picture, as private sales, which can make up a significant portion of the art market, are often not disclosed.
• Relying solely on online resources could result in a homogenization of taste, as collectors might be influenced by what is trending or popular on these platforms rather than developing a personal and unique collection strategy.

Establishing relationships with esteemed art advisors is essential for gaining the insights and access needed to navigate the realm of art collecting, especially for those who are new to the practice.

Resch suggests that those with significant funds or grander goals for their art collections consider hiring a professional art advisor, who can provide crucial guidance in navigating the sometimes opaque procedures of art transactions. Advisors act as navigators for novices embarking on their path within this domain. They will offer advice on selecting artists and securing fair pricing, as well as aid in acquiring pieces that might be difficult for a beginner collector without established connections to find. They also offer their skills in handling the practical details and documentation of the collection post-purchase, and provide impartial advice if the owner of the collection chooses to sell any artworks. Resch offers advice on how to choose advisors by categorizing them into two distinct categories, referred to as alpha and beta, and explains the different compensation arrangements that could be suggested to readers.

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Other Perspectives

• Art advisors' insights are based on their own experiences and networks, which may not be comprehensive or fully up-to-date with the latest market trends and emerging artists.
• While advisors can provide guidance, they are not the only source of navigation for novices; self-education, museum visits, and networking with other collectors can also be valuable.
• The use of art advisors can be cost-prohibitive for some collectors, which may limit access to their services and the benefits they provide.
• Some collectors might prefer to handle the documentation themselves as a way to maintain a personal connection with their collection and have a direct understanding of their assets.
• The definition of "impartial advice" can be subjective, and what one advisor considers impartial could be seen as biased by another, leading to a lack of standardization in the advice given.
• Such categorization could potentially pigeonhole advisors and limit the perception of their capabilities, which may not accurately reflect their individual strengths and specializations.
• The effectiveness of an advisor's guidance is not always immediately quantifiable, making some compensation arrangements, like success fees, challenging to implement fairly.