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7 Things to Look for When Investing in Art

Updated: Dec 17, 2020

Buy in cities over country

Invest in cities rather than in the country. Hong Kong is a great place to invest in art, since it is a financial centre, with lots of professionals and access to good reliable storage. It has been my experience that buying in a city is better than in rural areas, since it is less likely to get damaged, easier to maintain and to deliver the painting.

Bigger return on Japanese art than Chinese

Also, in terms of the auction market with Japanese painting, it is a bit behind Chinese contemporary art, which has been growing exponentially for 10-15 years. Japanese art in comparison, has only been growing the last five years.

In my experience, the top five Chinese artists are Zhang Daqian, Qi Baishi, Wu Guanzhong, Chu Teh-Chun and Zao Wou-Ki. The top five Japanese artists are Yoshitomo Nara, Shozo Shimamoto, Imai Toshimitsu, Kazuo Shiraga and Yayoi Kusama are still selling HK$5-10M, in comparison to Zao Wu Kee for example that is selling over HK$100M.

If we are asking why we recommend the Japanese market, it is because it’s only just started over the last few decades. If you go back to the 1950s after the WW1 and WW2, most of the art movements started from there. People started becoming richer, the economy started to improve, and people started spending on art. They understood how to keep art, since to this day, most of the Japanese paintings have been kept for 30-40 years and in very good condition. If you look at other countries a lot of the time it’s been damaged and for auction houses, you need it to be in a good condition to sell.

Art is non-market correlated

Alternative assets are non-market correlated and functions independently from the financial markets. With Japanese art in auctions, you will see a bigger return since the market is newer and they are growing faster. With Japanese artists, they can be a bit similar such as Zao Wou-Ki and Shozo Shimamoto, since they were both from affluent wealthy families which allowed them access to travel in the 1950s. They were one of the few that could afford to go to Europe to study abstract art. The differences in the auction market between Chinese and Japanese art is 10-15 years, but I believe Japan will catch up with China in 5-10 years.

Look for artists that are part of a movement

Invest in artists that related to important art movements and are part of history such as Imai Toshimitsu and Shozo Shimamoto, since there is no other Japanese abstract artists. Without the Gutai movement, they singularly brought Western abstract art to Japan.

Always look for artists that make you feel an emotion when you look at the piece. Many people say to me “I could throw a bottle on a canvas too”. But if you are looking back to 1950, it was so difficult for a Japanese person to fly to Europe to learn abstract art to bring back to Japan. At that time, Japan was very traditional painting water and waves, similar to Chinese art with flowers and birds, no one touched oil or abstract techniques. Therefore, it’s hard to compare to new artists now that have the ease of access to travel.

Invest in Asian art, but look to developing auction markets for the best value

I would recommend Korea, because it’s has a similar background to Chinese artists. Korean art actually grew on a similar time frame with Japanese, but Japanese art is more colourful. In the past our clients tend to buy colourful artwork. But with Korean art, it is quite similar to Chinese. It has long history, is good quality, but the difference, is that its generally dark, uses ink and grey colours. With India for example, they have very good artists, but the problem is mostly is the condition. Not only were the materials very expensive 50 years ago, but there is not a large enough quantity of impeccably preserved art from a single artist. Auctions can only work with a high quantity of artwork, but there just isn’t that many that date from that time. In comparison to Japan, the art auction market and the economy is improving, becoming more developed and people generally are well versed on art appreciation.

Suffering artists are not necessarily better

I always look back to history before making any financial decisions. The artists that are making millions in Japan were born in the 1920s and they have to be part of a significant art movement. Also, whilst reading into their pasts, we’ve found with our artists that they tend to be contradictory to the stereotypical Western myth surrounding the ‘Tortured Artist’. With Chinese and Japanese art, they coincidentally came from wealthy families, which in turn enabled them to fly to Europe to experience culture and sights first hand. Zao Wou-Ki and Imai Toshimitsu for example, travelled to Paris in the 1950s to learn art. Other wealthy artists included Shozo Shimamoto and Yoshitomo Nara.

Don’t expect a quick return, wait at least 5-10 years

It varies, but in most cases you need to wait 5-10 years. For example, with Zhang Daqian and Li Keran, it was HK$500 40 years ago and now its worth over HK$100M. It really depends on the art market as a whole or the client.

Asia is still an unstoppable trend

The Asian auction house market is around 20 years old, in comparison to Sotheby’s and Christies they’ve been selling for over 200+ years. In their case, most of the artists have already matured. In Asia, it is easier to find a rising star, because the market is so young and you can get a good return on your investment. The biggest art market in the world is America and the second is China.

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