Dos and dont’s of investing in art

Michael van Rensburg

THE most successful art investors are profit driven, numbers savvy, and always on the lookout for opportunities.

Futuregrowth portfolio manager Michael van Rensburg has been investing in art for almost 20 years.

“Ever since I was a young school boy, I’ve  been spotting opportunities to buy and sell things to make a profit,” says Michael.

“By the time I was a teenager, I had developed a keen interest in art, and when I realised there were good profits to be made in the art world, I was hooked.”

Michael bought is first serious artwork in 1994 –  a William Kentridge. This was the start of a lifelong interest in South African contemporary art, and Michael has since invested in a wide range of artists.

Michael currently follows artists such as William Kentridge, Dylan Lewis, John  Meyer, Robert Hodgins, Norman Catherine and Lionel Smit.

He attends auctions and exhibitions regularly to determine where the demand is lying. “Attending auctions is the best way to identify trends because of the willing buyer, willing seller principle,” says Michael.

Michael also keeps in contact with gallery owners and the artists themselves to keep his finger on the pulse.

He buys mostly for profit and does not let his own sentiment or personal taste get in the way.

“My decisions are all very much investment driven, but every now and then this will include art that I really like. These pieces tend to become part of my home collection which I’m not planning to sell,” says Michael.

Art is a relatively risky investment, and no one understands this better than Michael. Some of his biggest mistakes include selling a  Maggie Laubser before 2003, which is when the market turned on her works; as well as selling a William Kentridge original too early.

Unlike his day job, managing

money market funds, which by nature have averyshort term investment horizon, art investing is about being in it for the long haul.“Art is very much a long-term investment; it doesn’t mature and it is subject to global cycles,” says Michael.“As we all know, you need to apply different investment strategies to different asset classes, and art, as opposed to money markets, is about as different as you get.”However, when it comes to making investment decisions, Michael believes there are six universal keys to success.

Six golden rules

 

  • Patience. Know that your investment will pay off, but it takes time.
  • Meticulous research. You need to continually develop your knowledge of the market. Make sure your information is always up-to-date and that you understand the driving forces in the market.
  • Confidence. If you’ve done your research thoroughly, be confident in your decisions. Resist the urge to start second-guessing.
  • Know your prices. If you want to spot a good opportunity before everyone else does, you’ll need to know your prices back-to-front at all times.
  • Take quick, decisive action. When you see a good deal, move quickly.
  • Don’t get sentimental. Everyone knows this is a golden rule of investment, but it can be particularly tempting to get sentimental about art. Remind yourself regularly not to get too attached.

– Fin24

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