The Indian art market, along with that of the rest of the worlds has been going through a lean patch in the wake of the financial meltdown. However, art collectors should consider these times not just as a chance to pick up pieces at great valuations but like every financial advisor touts a chance to rebalance their portfolios. Over the last few years, when the Indian art market made international news and investors began aggressively building their portfolios with our modern and more so contemporary artists, there may have been some not so ideal choices one made. Some pieces that one feels do not appreciate, like an asset, and other’s which no longer intrigue us, or please the eye. In either case, investors should consider this as great a time as any to sell what they do not wish to keep and buy new pieces at great values, in effect just like one does for their equity portfolio, create the perfect blend of works one wishes to own.
For many novice investors who have only begun their journey into art investing recently, this is the perfect opportunity to undo some of the mistakes that may have been made in the past, without losing ones capital invested. Art investors though, much like many of our economists and behavioral analysts, are highly emotional and sentimental when it comes to investing. With that being the case sometimes one may end up keeping a piece because they genuinely enjoy the work irrespective of its monetary value, while others may do so to be reminded of the mistakes they have made in their initial foray into this market. Ironically, in a market as nascent as the Indian art market, many people who consider themselves to be experts, too have only just experienced a financially viable side to the Indian art market and hence too are liable to make mistakes.
Another rather bold reason that one should consider the art market’s current scenario to either enter or to rebalance portfolios is, that currently one has the best bet of selling some of the maybe more expensive works picked up earlier and using the liquidity created to buy newer/younger and upcoming artists and works they have seen. True, this is a gamble, however, if one were to gamble at all and enjoy the true thrills of this exciting market space, why not do it when one can buy the pieces at a far lesser value. Having seen so many of our contemporary artists, including Subodh Gupta being undervalued these days, it may the perfect opportunity to search for newer and hidden gems with our art industry. For those more attuned towards the financial markets, one can compare this to investing in say mid-cap or short-cap stocks in the current times to turmoil. While that is a risky proposition no doubt, the fact remains that these two indices have jumped by over 70% in the last quarter, and while in art the return period maybe considerably longer, so are the returns considerably higher. And, in any case, one should be thankful of the fact that global and Indian art buyers have improved the market conditions to a level where an artist is no longer only recognised, acknowledged, glorified and sold for millions after he’s dead!
Apart from rebuilding ones portfolio investors with liquidity should consider this as an opportune time to invest in the Indian art market for one will be able to make the most of the rock bottom prices. Contemporary artist works are being sold for far lesser and the modern artists not a lot more. This, given the Indian art market’s global standing, its own growing size of collectors and the limited good quality pieces recognised and available, it will add more value to one’s portfolio.