Beginner's Guide to Art Investment

Most people are familiar with traditional investment options like stocks, bonds and real estate. However, there are other ways to diversify your portfolio. One way is to invest in alternative investments. These investments include collectibles like antique musical instruments, jewelry and first edition classics. Another popular type of collectible is artwork. These items sometimes can appreciate in value, but are they right for your portfolio? This is what to consider before making your first art investment.

Consider working with a financial advisor on suitable alternative investments for your portfolio.

How to Invest in Art

Art acts like any other investment, where it can gain value over time. The U.S. is the leader in global art investments, accounting for 43% of total sales by value.

It is not just household names that carry value, either. Many art investors collect works from new or emerging artists, hoping that the piece’s value will increase.

However, investing in art comes with its own range of risks. If you don’t have the right investment strategy in place, you risk losing a significant amount of money over fakes, copies or low-value duds. Therefore, it is important to take the time to conduct proper research.

These tips can help as you begin investing in art.

Establish a Realistic Budget

The 2025 Global Market report from ArtBasel and UBS shows a 12% decline in the global art market during 2024. However, it was the high end of the market that was mostly affected. This means a smaller budget can still be valuable in the art world so you do not have to come up with a large amount of capital to get started.

Instead, determine the minimum and maximum you are willing to spend and stick to your budget.

Do Your Research

Investing in art is not an area where you will benefit from going in blind.

Take the appropriate amount of time to research before you shop or head into an auction. There is plenty of information at your fingertips through the internet, whether you prefer videos, journals, databases or blogs. You can also visit local museums, galleries or pop-up art exhibitions in your spare time.

Overall, you should find the type of artwork that interests you and fits into your financial goals. That requires you to build up your knowledge about various art movements, styles, mediums and more.

Avoid Trends

If you never put thought into art before, it might seem like it’s all the same. However, the world of art is made up of more styles and directions than you probably realized. While some may prefer a certain school of art, you may not. Do not follow buying trends without first considering your preferences. There may be other investments that suit you better.

Comparison Shop

When you like a certain musician, you look for others with a similar sound. The same sort of method applies when you investigate which artists work for you.

If one piece stands out, look into the artist’s other works. If that painter or sculptor was a part of a movement, look for others that match. It is easy to familiarize yourself with an art piece, thanks to the internet. However, try to see the work in person if possible or at least obtain the dimensions before you make the purchase.

Follow Your Instinct

Preparation and research can fly out the window if you give into pressure. Gallerists and art advisors may try to sway you towards certain moves, or the opinions of others might make you doubt yourself.

However, it is important to stick to your initial reaction. Ask for details about the piece you are most interested in, and take your time researching it to ensure it is the right investment for your needs.

What to Look for When Buying Art Investments

If you are not familiar with the art world, finding an investment can be overwhelming, as there are all kinds of styles and mediums.

To start, narrow down your search as much as possible, and consider the era or direction that interests you most.

These are some popular types of art for investing.

Originals. Like the name suggests, this is an original artwork. Their rarity commands high prices, but they also usually have an even bigger resale value.
Prints. These are copies of originals. They are still considered art and retain value, but they do so at a much more affordable price. This lowers their payoff, however. Their rarity (and thus value) increases depending on the techniques involved, whether it is from a limited batch or if the artist signed it. Prints are good starting points for some collectors, but be careful when assessing whether a particular print will increase in value or not.
Gicleés. This a higher quality print. They are priced higher than normal prints as a result and are often classified as museum quality. When you purchase one from a dealer, it will likely come with a certificate of authenticity.
Reproduction. These are also copies of an original work. However, unlike prints, they are not made on a limited run. They are the most affordable option but do not have much investment value.

It is also recommended that you work with an art advisor or investment professional specializing in art, especially if you are a beginner. While you can take the time to research, art investment involves a lot of know-how, and having someone with the right knowledge is valuable. Not only can they help with identification, but they can help you determine the appropriate price for a work.

How Art Is Valued: Key Factors That Determine Price

Unlike traditional assets with clear pricing models, art values can be highly subjective and influenced by a wide range of factors.

Artist reputation. Well-known artists with established careers and strong auction histories typically command higher prices. Works sold at major auction houses like Sotheby’s or Christie’s often carry more stable and predictable value.
Provenance and authenticity. Provenance refers to the documented history of an artwork’s ownership. Clear, verifiable provenance can significantly enhance value by reducing the risk of forgery or theft. Certificates of authenticity and expert appraisals are especially important for newer or lesser-known artists.
Condition, size and medium. Artworks that are well-preserved, created with durable materials (such as oil on canvas) or produced in standard sizes often have broader appeal. Damage, poor restoration or unconventional formats can lower an artwork’s resale value.
Historical or cultural significance. Works tied to specific movements, eras or social events may hold increased long-term value, particularly among museums or academic institutions. Even lesser-known artists can gain value if their work aligns with a trending historical or cultural theme.
Market trends and demand. Shifts in collector preferences can affect value. Contemporary art may become more desirable during certain periods, while classical styles may gain popularity at others. Following auction results, gallery shows and major art fairs can help you stay ahead of market trends.

By familiarizing yourself with these factors, you’ll be better equipped to assess potential purchases and avoid overpaying in a subjective, often opaque market.

Understanding Risks Involved in Art Investments

Just like any other type of investment, art comes with its financial risks. One of the main risks is an inability to sell the item in a timely fashion. In other words, art tends to be highly illiquid.

Another risk is that the art may depreciate in value rather than appreciate. There is no guarantee that an artist will remain popular or create works with a consistent value. Even some of the most famous artists weren’t appreciated during their time.

Say you take an interest in an upstart artist. You like the person’s work, and it seems like people are starting to notice the talent. However, within the next year, someone may take that artist’s place, and then the work could depreciate. Overall, it’s hard to predict who will stay a permanent fixture in the community and who will fade out.

Sometimes you can mitigate that risk when you have a solid art history or appraisal foundation. However, there are multiple markets, and a lower-priced item in one doesn’t automatically make it a steal.

Depending on which market you’re investing in, you’ll see works subject to different price scaling. It’s important to know comparative values within the medium or era, whether you are looking at etchings, prints, photographs or paintings.

There are also associated costs for storage and security. You may think you will buy an oil painting and just hang it in your home. However, artworks often require a particular climate to prevent damage. That may be even more important if you plan on waiting for the value to increase. Therefore, you will require storage for the piece, which can come at a significant cost.

Furthermore, if you have to ship it anywhere, it is crucial that you insure it. When it arrives, insure it again.

Overall, it is vital to have the right knowledge before investing in art. Otherwise, you may spend more than you intended without any solid return waiting at the end.

Is Art a Good Investment?

Art is a long-term investment. Numerous art investors even include art in their estate plan. This means that there is the possibility of a high return after the work has accrued value.

Also, the art market does not follow the same patterns as the stock market. Therefore, even if your ETFs or stocks perform poorly, your art investment’s value could remain high or even increase. Part of that value depends on the rarity of the work, though, and with that comes risk. Many factors can shift the value of the work in your possession.

Some investors may not be comfortable with that kind of risk, whereas others may see it as an opportunity to diversify their portfolio. Whether or not it’s a good investment depends on the investor and their circumstances.

Is Art Investing Right for You?

Art investment is in a unique position where you trade in physical items. You can see and enjoy the works you bid on. In fact, many art investors begin their journey as collectors or frequent gallery visitors.

It is better if you have an affinity for the artworks you purchase because they are typically not profitable. You may find luck every now and then, but generally, the higher the possible return, the more expensive it is to buy. A single piece can sell for millions of dollars.

If you aren’t ready to invest that much and do not want to wait long-term to generate a profit, you may have to consider smaller artists. However, this often makes the piece less valuable.

Overall, the risk is high and the time horizon is long. It takes consistent research to stay on top of the market. If you can handle that commitment, along with associated maintenance and advisory costs, art investment could work for you.

Bottom Line

Art investor walks out of an auction with a painting

Art investments, like investments in other types of collectibles, such as classic cars, vintage clocks and bottles of ultra-high-price wine, may not always pay off. Regardless, art is not the only investment you want in your portfolio. Be sure to allocate your assets so your overall portfolio can accommodate the risks of your art investment. Diversifying minimizes the threat of loss if markets take a turn while protecting your financial stability.

Consider working with a financial advisor to determine the right kind of commodities for your portfolio based on your time horizon and risk tolerance.

Tips for Investors

Art investment requires you to know your financial standing. Without a solid grasp on your risk tolerance and long-term goals, you risk failure in the future. This is where a financial advisor can be invaluable. Finding one doesn’t have to be hard. Use SmartAsset’s investment calculator to help cement your preferences and objectives. If you’re ready, get started now.
There are risks when it comes to investing in art, and it’s not alone. Many alternative investment options might not work for your particular situation. However, that shouldn’t stop you from investigating your options. A financial advisor can help you determine which products suit your financial plan and structure a strategy for you to follow. SmartAsset’s free match-up tool makes finding the right financial advisor easy. With only a few questions and five minutes of your time, you’re paired with local advisors ready to help. If you want to go after your financial goals, get started now.