NEW DELHI: If you are one those lucky, inadvertent investors who discovered a rare Ram-Sita coin from Emperor Akbar’s reign tucked away in a sandalwood box under your grandma’s bed, or bought a painting from the local College of Arts only to find that the artist has become a hot property 20 years later, then of course, you are that — a lucky investor.
For the rest, investment in physical art and antiques that might fetch good returns is a patient business that requires educated analysis, in some ways similar to choices made in buying stocks and bonds.
“Both art and antiques are great investments for people who want to put money aside for long term,” said Sujoy Roy, director of Your Art House, an art curation firm. These investments are however quite illiquid, says Roy. “You can’t buy today and sell the next week and expect great returns.”
In the past two decades, the global art index — Sotheby’s Mei Moses index — shows that the market for contemporary art alone has outpaced most stock market indices, with $100 invested in contemporary art at the turn of the century fetching more than $200 now.
One of the reasons for the higher returns over long term is that there are less of antiques and good art to go around, compared to stocks that help push up values. And there is, of course, the keeping up with the Joneses effect.
“Arts and antiques are physical in form, so you can show it off, hang it in your company’s boardroom or at home, unlike a hoard of stocks that are in demat form and can’t really be shown off,” said Roy, an alumnus of Delhi School of Art.
Despite the long holding periods, antiques and art investment is not just a rich man’s hobby. There are options for affordable art and antiques.
Affordability, backed by new selling places on internet, have driven the prices of antique coins and stamps, for instance.
“A Queen Victoria gold Mohur, which sold for Rs 7,000 a dozen years ago, can now fetch over Rs 2 lakh. This price rise is partly on account of a new class of investors entering the market and partly because there is more awareness about antique pricing and certification,” said Amit Bannerjee, a merchant banker.
“Our research shows that investing in low-priced art tends to fetch better results,” said Roy.
“A Jamini Roy or Bendre would have been costly two decades ago and the price appreciation would not be as much as a young artist just out of Mumbai’s JJ School of Art. You have to have either eye to pick up the right artist or have an expert to consult if you want to invest in upcoming artists,” said Roy.
Chennai’s Arti Sunder, Pune’s Prabhakar Pachpute, Hyderabad’s Bhaskar Rao and Anirban Mitra are among the upcoming artists whom investors seem to think highly of.
As with stocks, an individual antique or work of art could perform far better than average; which means that your personal picks may outperform or under-perform the Sotheby’s Mei Moses index.
“Every art expert will have his own list of best upcoming artists. But what counts is 10 years later, which one of these guys continue to be the rage,” admitted Roy.
Similarly, the value of antiques rises over time as specific craftsmen, styles or historical periods become popular. Coins and stamps issued by Subhas Chandra Bose’s Azad Hind government have become valuable in recent years as this period of contemporary Indian history is being re-evaluated for instance, says Bannerjee.
Ideally, Bannerjee feels that a person should consider placing about 20-25 per cent of his portfolio in illiquid assets, which can include art and antiques.
“Mind you, investing in art and antiques require knowledge on how to take care of them as well. Damaged paintings and antiques obviously fetch far less,” he cautioned.