Cornwater Fine Art Gallery - Specialist dealers to the trade and retail in original paintings and signed prints by L.S. Lowry, David Shepherd and Russell Flint.

Understanding Investment In Art And The Benefits Behind Art As An Alternative Investment

The main aim of investing in anything is trying to earn more than you invested, which is mostly referred to as profits in business terms. However, this calls for some level of risk management because with investment, the future is unpredictable. The main idea behind investment in art is trying to create a level ground between risk and return.

However, many people believe that committing your money on this line of business may not turn out to be a profitable venture. The truth is, this type of business is more profitable compared to any other type of business out there in the business world. This is because, when you visit galleries that have works of famous artists, it is possible to find paintings of famous artists costing a huge significant amount of money.

The only secret with this type of business is to ensure that you create a good reputation and that your work is of high quality. It is also possible to purchase some pieces of work by famous artists and use them in your line of business. Nonetheless, always ensure that that piece of work that you purchase will be able to give you a good return after few years.

Self determination and judgment are the main pillars behind this line of business. Therefore, it is important for you to do a feasibility study to determine whether a particular piece of work will provide sufficient returns after a specific period of time. This enables you to generate money to be able to buy more pieces of work as well as expand your business if need be.

The advantage of practicing this type of business is that it enables you to be able to reduce the level of risk in the market. This because this business does not depend or is not influenced by external forces such as burgeoning and dwindling of stock markets. Therefore, the probability of an investor suffering a loss is always minimal regardless of the current economic state.

There are various reasons that prompt prospective entrepreneurs to invest in this line of business. A favorable tax rate is one of the reasons behind the development of this type of business. This business does not attract high tax rates because its returns are long term thus it is taxed at a long-term capital gains rate.

This business is known to have a good and reliable rate of return due to its long term nature. This, however, depends on where you sell your pieces of work most preferably in galleries which attract high buyingprices. Art is more of a glass of wine that gives you courage and makes you more apt for passion.

Lastly, investment in art acts as a tool for asset diversification thus reducing the level of risk in case of any eventuality. Having different forms of business ensures that you diversify your resources in various channels in order to not only reduce risk levels, but to also increase profits. However, it is good note that the capital requirements for this line of business are quite demanding even though the profit levels are attractive, it requires a significant amount of money to be able to set up this type of business.


David Tatham has been working in the world of fine arts for over many years and his website http://www.davidshepherd.com contains a wealth of information, also hundreds signed, limited edition prints and original works of art by world renowned artists, for example the conservationist and wildlife artist, David Shepherd.

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