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Investing in paintings - everything you need to know about this asset class

By Finserv MARKETS - Aug 2,2019
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Investing in paintings - everything you need to know about this asset class

In 2010, a painting by Indian artist Syed Haider Raza called ‘The Saurashtra’ sold for a record 16 crore, the highest bid ever for any painting by an Indian artist. A few high-profile auctions such as this one by Christie’s in the last decade brought paintings by renowned Indian artists to the world scene and has lured many into investing in paintings.

Like all things that look glamorous and lucrative from the outside, investing in art is not as simple as buying a lottery ticket and winning a jackpot. One of the biggest hurdles to investing in paintings is the investment, unless you have a few millions lying out there. And there are other issues such as storage, preservation, authenticity, lack of insurance and other truckloads of things to take care of.

Comparatively, a better, simpler and safer alternative is to invest in gold. Buying and storing gold is even more convenient and safer now with digital gold from Finserv MARKETS. Before we get into the benefits of buying digital gold, we’ll try to bust some myths related to investing in paintings by presenting a few facts.

Facts related to investing in paintings 

  • You shouldn’t by art with a short-term investment horizon. One must stay invested for a long time; minimum 10 years.

  • Not all paintings from a renowned artist are a masterpiece. You need an expert to identify a masterpiece.

  • You have to carry a complete research of the artist before you buy his work.

  • Price of a painting does not necessarily increase after the death of the artist.

  • You have to pay 10-25% of the bid price to the auction house when you buy a painting in an auction.

  • Paintings lose value and life when hung on the walls. Special storage and preservation techniques need to be employed.

  • Oil on canvas is the most expensive form of painting; second acrylic on canvas; third most valuable is acrylic on paper.

Disadvantages of investing in paintings

A decent painting by a renowned Indian artist such as Syed Haider Raza, M.F. Husain, F.N. Souza and Anjolie Ela Menon can cost you a minimum of Rs.10-15 lakhs. As mentioned earlier, there’s no guarantee those are masterpieces unless you consult an expert. This means that there is a huge entry barrier for the small investor. Other disadvantages include:

  • Unlike western countries there is no agency or standard to evaluate paintings in India. At times you may have no clue what you are buying.

  • Since the market is unregulated there are higher chances of frauds and buyers getting duped with counterfeit work.

  • It is difficult to spot potential winners or those that will give the highest return on investments.

  • If you are not careful, your painting can turn into dead weight and you won’t be able to liquidate due to lack of potential buyers.

  • Preserving and storing artwork is a complex and tedious process.

A better, safer alternative

When you invest in gold, the most convenient way is to buy digital gold, which you can also buy online at Finserv MARKETS with just a few clicks. Investing in gold is far better than putting your hard-earned money on paintings that can turn into deadweight.

Advantages of digital gold

When you invest in gold at a physical store, you have to worry about storage, theft or being duped with below grade gold. When you buy digital gold at Finserv MARKETS, you don’t have to worry about gold quality, purity and safety. You can sell digital gold anytime you want and redeem your purchase if you want to take physical possession of the gold.

Unlike buying physical gold, you don’t have to invest a huge amount of money while buying digital gold. You can start with as low as Rs.100. The digital gold that you buy at Finserv MARKETS is insured against theft and loss and you don’t have to pay a penny for storage. Another benefit of digital gold is that you are assured of pure 24 karat, 99.5% purity and there are no making charges involved unlike buying jewellery.

Gold cannot be compared to conventional investment tools for short-term gains but it has always proved effective for increasing wealth in the long-term. Moreover, when you invest in gold, you take advantage of triple benefits: hedging (to cover other investment losses), safe haven (sell or take a gold loan when times are tough) and direct investment to grow wealth as the value of gold appreciates.

“Finserv MARKETS, from the house of Bajaj Finserv, is an exclusive online supermarket for all your personal and financial needs. We understand that every individual is different and thus when you plan to achieve your life goals or shop for the gadget of your dreams, we believe in helping you Make it Happen in a few simple clicks. Simple and fast loan application processes, seamless, hassle-free claim-settlements, no cost EMIs, 4 hours product delivery and numerous other benefits. Loans, Insurance, Investment and an exclusive EMI store, all under one roof – anytime, anywhere”!

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