Collecting art

(By Nalini S Malaviya)

Most people who have enviable art collections are those who began collecting randomly and often just by chance. Most of them began collecting in the sixties and the seventies when collecting art was not in fashion and it definitely had not become a fad then. Buying art for the sake of financial investment was completely unheard of; nobody could imagine that one day these works of art would appreciate to the extent that they have.

These were then a few scattered individuals who bought art out of a passion for it and that too at very reasonable rates. It was not uncommon in those days to buy art for a few hundred rupees to a couple of thousand. Although, these amounts were considered to be exorbitant for those days, but when we look back, we can only marvel and feel nostalgic. Today it is unlikely that you could buy a work of art for anything less than Rs 10,000.

Collecting art is quite different from investing in art, although both can become synonymous with each other. The advantage with building an art collection is that one passionately buys only those pieces, which engages him or her, and over a period of time the collection can become quite significant and valuable both in terms of its monetary worth and its historical value. On the other hand, people who look at art purely from an investment angle tend to look at things very clinically, still it is quite possible that they too amass a significant body of work over a period of time if they retain it and not tried to sell artworks frequently.

As collectors believe in holding on to their works for longer durations, their collections grow much more as a financial investment even though that may not have been the primary objective. Most collectors are wealthy and have the capacity to tide through recessional times and they remain largely unaffected from the ups and downs of financial markets. This is a major advantage that they have, which normally other investors may lack and which is why it is important to consider art as an asset class only when one is diversifying their investment portfolio. On the whole, for those who can afford to, collecting art can be extremely rewarding in more ways than one.

(Abridged vn published in Financial Times)