Dan's Papers - Issue #4 - April 20, 2007

Investing in art may be the most confusing thing in the world. A man who splatters paint on an oversized canvas? Adults who draw with crayons? Or cut shapes out of cardboard? To the average person, purchasing pieces like these do not make sense. And if that's the case, then they shouldn't.

The first rule of collecting art is to buy something you like. There is no reason to spend tens of thousands of dollars on something that will be kept in storage because you cannot bear to look at it or, even worse, shutter every time you gaze at the wall. It is possible to find something in the same price range that meets your ascetic.

If the inheritance has just kicked in and you've decided to invest the money in art, but haven't a clue where to start, or don't have any notion of what you like, start with the basics. Visit museums and galleries, pick up some art anthologies, or attend an art history class. The knowledge you have when beginning a collection will be reflected in the actual collection.

Mark Borghi of Borghi Fine Arts in Bridgehampton and Manhattan has some great advice about starting a collection. Know what you want. Know who you are buying from, and when you find a dealer whom you respect and trust, stick with them. They can help you continue establishing your collection. Buy American. "American paintings have great upswing," Borghi says. His other recommendation is to stay away from auctions. The auction market is insane right now. Blue Chip artists are out of most people's range, but even lesser known artists are selling at prices that exceed their quality. Therefore, most dealers have shied away from purchasing art at auctions and so should you. This goes especially for Contemporary artists who are experiencing inflated values on their work, who may not hold their value.

If the inheritance didn't just kick in, this doesn't mean you have to wait until you've got a million in the bank to start buying art. Start like many artists have, with works on paper. Some great pieces are available in the $10,000-$15,000 range, and for a little more, de Kooning's works on paper start around $40,000. It may seem like a lot of money, but when you factor in that a select few of his paintings sold for $10.6 million at auction, it's a drop in the bucket.

According to Borghi, the trick is to buy the best your money can buy. If you've got $5000, spend $5000, If you've got $1 million, buy a million dollar painting. But don't speculate. It isn't worth it. You may think you are discovering the next great undiscovered artist, but you probably aren't. If you like the work and don't mind spending the money, then fine. But if it doesn't appreciate, don't get mad. To ensure that art will increase in value, only buy known artists.

There are a few fallacies to keep in mind. The first is that bigger is always better. Yes, some oversized paintings sell for millions upon millions, but they are also quality pieces. As with anything, quality is key. The second thing to remember is that dead artists don't equal big bucks. According to Mr. Borghi, speculating on the death of an artist and purchasing their work while alive, does not guarantee a fortune once they pass away. The reason that so many works by dead artists are so valuable is that they have proven their resonance with generation after generation. Collecting art isn't exactly like collecting antiques. Age doesn't play as much a factor in price. It is the track record that really counts. To find that out, many pieces have auction records, which will explain how their prices have appreciated over the years. This can give you information about an exact piece or a general idea of the value of an individual artist.

Although buying contemporary art is sometimes unpredictable, Mr. Borghi only represents 3 living artists, which makes up about 5% of his total inventory. One artist is Robert Dash, whom he will be featuring at the Hamptons Home and Garden Show.

By following these tips and keeping tabs on the art world, you can really make an investments grow and maybe make your house dazzle too.

Not only will Mark Borghi have an entire booth at the Hamptons Home and Garden Show, but he has galleries in Bridgehampton, Manhattan and Los Angeles. Visit www.borghi.org for more information.