'Should I shred my Banksy?' and other art investment questions

It was a beautiful moment.

A print of Banksy’s famous Girl With Balloon sold for more than £1m at a Sotheby’s auction last Friday, only to immediately pass through a concealed shredder within the frame, provoking gasps and horror from the audience.

The new owner presumably at least gasped and probably swore, but they shouldn’t have worried.

Shortly after the event, it was estimated by several art dealers that the painting had probably increased in value by between 50 per cent and 100 per cent.

Then, as if the performance itself wasn’t bizarre enough, My Art Broker tweeted to ask Banksy owners to resist shredding their own works.

The warning came too late for one of their would-be customers. Ian Syer, co-founder of MyArtBroker.com, said a potential customer had approached them, having shredded the bottom of their limited edition of Girl With Balloon in the hope of enhancing its value.

“What this person today seems to have done is needlessly ruin a print worth around £40,000 and reduce its value to almost nothing,” he said. “We strongly recommend nobody else takes valuable art and tries to cash in on what history will judge a simply brilliant stunt.”

It’s a great story that you have to hope was just the owner joking around. Few of us are fortunate enough to own limited edition Banksy prints, let alone be stupid enough to copycat shred them.

But more people are buying art, especially younger people. Investing in art is not just for older, wealthier people. Research carried out by US Trust, the private wealth management division of Bank of America, shows that baby boomers are the dominant generation of art collectors but that millennials are the fastest-growing segment, with ownership up 8 per cent year-on-year.

The Deloitte Art and Finance Report revealed that 5 per cent of collectors are now consequently purchasing art with an eye for long-term investment.

Know the risks

Susan Eyres, owner of the Gateway Gallery in Hale, Greater Manchester, speaks to lots of would-be art investors and says there’s lots of interest in art as an alternative investment.

But she warns: “Art is an unregulated market. In the financial investing world, the consumer is protected by the Financial Conduct Authority or the Financial Ombudsman. There are strict rules on misselling and you have to be qualified and approved to offer advice to clients.

“Even in this regulatory environment, examples of financial scandals and misselling are too numerous to list. None of this applies to the art market – it truly is buyer beware.”

Be aware of bubbles

Anita Choudhrie, founder the Stellar International Art Foundation, warns: “Bubbles can emerge and this should not be forgotten. A global art market index published by the University of Luxembourg discovered that prices for contemporary and post-war art fell by 21 per cent and auction sales declined by 29 per cent, despite more paintings being sold in 2016.

“These concerns have been somewhat alleviated by record breaking sales in 2017, but the fact that reputable artists like Bacon and Rothko suffered 20 per cent falls in price is cause for caution.

“Any engagement with the global arts markets therefore necessitates careful consideration of volatile trends, extreme diligence and a reasonable degree of luck. Art needs to be invested in like a monetary asset if it is to act like one.”

Ask for help

Mary Claire Boyd, fair director of the Winter Art and Antiques Fair Olympia, says it’s vital you never feel stupid for asking questions, especially about the price of a piece.

“Don’t be intimated by an art dealer’s knowledge – learn from it, use it,” she says. “They have probably been studying their area for over 20 years and are happy to talk about the history of a work and why it is special. This will help you understand the price.

“Pricing can seem mysterious as every piece is unique so has to be priced as such but it will be affected by rarity, materials (oils paintings are more valuable than prints), craftsmanship and, like so many other things, current taste and fashion.”

Invest for the long term

Eyres adds: “Our rule of thumb is that you have made a good investment if you hold a painting for about seven years and can get back for it what you paid‎. After this period you should, given all the above, be moving into profit.

“We recommend a minimum holding period of 10 years. This might seem, on its face, a little unexciting – but it actually represents a good return on your money.”

Watch the market

Artist Kate Brinkworth says: “If you have a good eye and a good hunch that it is a quality piece of work both in its ideas and its execution, then it stands a chance that it will be a wise investment for your own satisfaction and the chance that someone else will think the same if you wish to resell.

“But it also depends on your reasons for owning art, for investment, for collection, for your own love of the piece? The market is fickle, goes in fashions and cycles.

“One hint for the moment is investing in women’s art. Galleries such as the Uffizi are including more women to their collections and recent sales in New York of female artists are at a high.”

Buy originals if you can

While Banksy prints may be worth a fortune, it’s good to invest in originals when you can, especially when it’s with newer artists whose work might be more affordable. For the better known artists, of course, a print might be the only affordable way in.

Lucinda Costello, fair director of the Affordable Art Fair, says: “Invest in original art. Buying art can be a great investment for the entrepreneurial collectors out there, who get a thrill from finding up-and-coming artists, perhaps at recent graduate shows, and just having a hunch that they’re going to make it big.

“Or, you may be keen to invest in an artist who is already established: many Affordable Art Fair artists are now household names, so picking up a sought-after Mark Quinn or Damien Hirst print is a great way to invest in a well-known artist, whilst still being on a budget.”

Buy what you love

Ian Weatherby-Blythe, group managing director of Washington Green Fine Art and the Castle Fine Art network of galleries, said: “In recent years, the global art market has hugely increased in value, leading some to see art as a huge investment opportunity.

“Buying art is a very personal thing – I think you should always buy a piece of art because you love it, not to make money from it. However, a lot of people do buy art as an investment and do very well out of it.”

Educate your eye

Buying what you love is probably the best advice out there, but art collector Victor Benady recommends taking time to learn about art so you can really find what it is you love best.

“You need to work out what it is you actually love and that comes down to research and training your eye,” he says. “Instagram is a pretty good starting point but can be misleading as most people on there have an agenda, so download a mobile app like Artland.

“[That] allows you to explore the collections of more experienced collectors and of your generation and what galleries are offering them. Develop your critical perspective and take that out in to the real world so that you can begin to filter the huge amount of noise out there.”

Buying what you like can pay…

This isn’t the first time Banksy has riffed off the commercialism of art. Back in 2014, the artist erected a pop-up art stall in New York’s Central Park and flogged a series of original signed prints for $60 (£45).

No one realised who the seller was and so only people who genuinely loved the work bothered to buy it. Two of those canvasses later sold for £120,000. So maybe buying what you like really is key to investing in art. At least then you can enjoy owning it no matter what happens to its value.