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The skill and art of choosing artworks
Having witnessed jittery and shaky art market globally over the last couple of years, experts are optimistic that it will tread into positive territory in 2010. They have reasons to believe that the market's fortunes will be revived. It is widely believed that the most valuable art will be coming out of China, Russia and India in the next decade or so.

So if you have the passion and money to collect art, now is the time to dabble. In fact, a recent news report ‘HNIs look to diversify investments’ (Madhu T; ToI News Service) based on opinions of several wealth managers, concludes that many high net worth individuals are indeed trying to diversify their portfolios across a range of asset classes. Importantly, they are now looking for alternate avenues.

Vishal Kapoor, general manager (wealth management) of Standard Chartered, is quoted as saying: "Now there is a perceptible change in the investors’ behavior and mindset." In fact, many wealth managers mention of investing in art to diversify. Pankaj Narain, director, head private clients (banking and investments), Deutsche Bank (India) concurs with the fact that HNIs have began spreading their investments to diverse asset classes. Himself an art collector, he underlines that it’s still to pick up a big way in the country, and believes it will take some time before contemporary Indian art forms an integral part of investment portfolio.

Signs for the future are positive, though…No surprise, the consulting editor of Forbes India, Sanjoy Bhattacharyya, is betting on art for good returns. However, the fact remains that India on the global art market is a recent phenomenon. A majority of buyers in the country have probably been involved in the art market for not more than a decade. They are still in the process of grasping finer points of art appreciation and collecting.

Investing in art, or for that matter, any asset class demands meticulous research, information and analysis. An essay in the BBC NEWS underlines this fact by stating: “The secret to investing in art is identifying where the market's next trailblazers are likely to come, and knowing what art to pay attention to now.” And this is where the judgment of what pieces and which artists will gain in value and stature over time comes into play. A little bit of background work definitely helps. It is important to visit the museums and galleries to get acquainted with the world of classic, contemporary and modern art. You cannot become a collector simply by looking around and randomly picking artworks.

A wise word of advice from specialists sure helps. Nirmalya Kumar, professor of marketing and co-director at the Aditya Birla India Centre, LBS (London Business School) provides just that. The expert advocates that one should be clear about one’s objectives of collecting. “If you buy art as an investment, diversify the portfolio. However, unrelated paintings by different artists would be interesting, but not really unique. To make it meaningful, the collection must be more than the sum of its parts. Its uniqueness is decided by the quality of the core concept. Collecting is more about imagination and vision than wealth.”

In this context, a recent conversation with Pheroza J. Godrej courtesy Forbes India, on leading online financial resource, comprises some interesting insights. Giving a backgrounder to the phenomenon of art for investment, the conversation mentions: “Some investors were influenced by the increasing interest in art, on the back of successful auctions and growing participation of top Indian artists in international exhibits. Naturally, they didn’t want to be left out. Unfortunately for them, art had already attained a high premium by then. Today, there is no desperate selling in the art market. There are not many good works easily available, which can be bought at a throwaway price.”

The founder of Mumbai based Cymroza Art Gallery observes that art sales have gradually picked up within a range of up to Rs. 5 lakh after an impending correction. This, she adds, is a healthy trend as the price level could be pushed up gradually to Rs.10 lakh. She suggests that aspiring collectors should start small and buy works within their budget. She sums up to state: “My view is that something as precious as art should not have been treated as a commodity to be traded in the market. Art is something personal in nature. Don’t buy only from the point of view of how much it will appreciate in value. You have not to do it just to make money and surely not for short-term. Buy works of art you are prepared to live with. And returns will eventually come."