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Investing in art

Type the words "art fraud" into an Internet search engine, and be prepared for the time it would take to look up the results: all 23,300 of them. Turns out the world of art, or at least the business of art, is a drama full of villains and heroes. With so many players (dealers, consultants, agents, forgers, insurance companies, lawyers, artists and art-lovers), you really need a program to follow what's happening on stage.

So, if you've inherited a painting from grandma, bought what you think is a valuable print at a garage sale or just want to start putting some of your hard-earned cash into art investments, how do you avoid the pitfalls and end up with something of value? Read on.

Visit galleries, meet curators and dealers
"People think that investing in the art market is safer than the stock market," says Miriam Schiell, Toronto gallery owner and a board member of the Art Dealers Association of Canada. "But I can't emphasize enough the highly speculative nature of it. The joke is that the art market is the Wild West with fewer rules and no regulation."

It pays to educate yourself, says Schiell. Visit galleries, talk to the curators and dealers, get to know what you like and who you can trust. For younger people, she says, haunt the little galleries off the beaten track. "Buy from your generation," she advises, and avoid the ABCs -- paintings selected to fit above the couch.

Art dealer and Toronto gallery owner Leo Kamen, who specializes in contemporary Canadian art, says you should "choose the tougher piece over something more comfortable, so it doesn't just become part of the wall after three months. And for God's sake, don't let your interior decorator pick your art."

It's not snobbery that's behind this advice. If you buy from emerging artists with no proven track record in what's called the secondary market (i.e., where someone other than you has been willing to shell out the big bucks), you can't predict with certainty a work's future dollar value. So at the very least, spend your money on something with intrinsic value that you will enjoy for its own sake.

Still, when approaching the art world, there is a snob factor, and if you're going to become a knowledgeable collector or investor (and yes, there is a difference, best defined as the distinction between marrying for love and marrying for money), you have to get up close and personal.

Getting an appraisal
"It is true that people fear the art world as elitist, snobby, full of a certain mystique," says Suzanne Davis, president of Christie's Canada, an international fine art auction house. "But today, people are more knowledgeable on all sides, and so-called experts are far more approachable."

Auction houses, and there are several major ones (Christie's, Sotheby's, Joyner Waddingtons, Ritchie's and Heffels), can provide you with an appraisal of worth after assessing both the work and its authenticity, and a marketplace for both buying and selling. In dealing with the art market, Davis says you need to realize there really is no such thing.

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-- Posted: Feb. 16, 2006
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