By WM January 29, 2024
Magnus Resch, hailed as "the world’s leading art market expert" by CNN, has recently authored a comprehensive guide on art collecting. Titled "How To Collect Art" (published in January 2024 by Phaidon), the book serves as an indispensable resource for those navigating the complexities of the art market. Resch, a prominent figure in the field, shares his knowledge as a distinguished instructor of art economics courses at Yale. With several bestselling books on the topic under his belt, his latest work provides valuable insights that every collector should consider before making a purchase. Here's an excerpt from the introduction of "How To Collect."
I entered the art market as a young and hopeful (if naive) gallerist twenty years of age, but headlines about the art market have never really changed. Stratospheric prices have led to stories declaring that the market is booming, with the underlying message that, with a little luck, a fortune can be made more easily than in almost any other line of investment. The origin story behind this conviction lies in sensational sales, like da Vinci’s Salvator Mundi, which was bought for only $1,000 dollars and sold for $450 million—a 450,000-fold increase in under ten years—or the rabbit sculpture by Jeff Koons, which sold for $91.1 million, or the NFT by digital artist Beeple, which sold for $69 million. The excitement incited by art and the prices it attracts creates overnight superstars in a modern world in which contemporary artist Damien Hirst, who came to the fore with the Young British Artists of the 1990s, has made more money than Picasso, da Vinci, and Monet combined during their lifetimes. Records at auction are broken and broken again, galleries are everywhere, and the aisles of art fairs are packed with stars and celebrities.
None of this, of course, reflects the experience of most people involved in the art market, including the potential buyers for whom I wrote this book. Buying art is not for the fainthearted. New buyers are overwhelmed by the continual surge of new artists and new forms, by pricing that is arbitrary at best, and by the limited number of brands that can offer a comforting anchor of recognition. To add to this uncertainty, there are no definitive criteria that clarify what “good art,” or indeed “bad art,” might be. And you will soon realize that throughout the industry, people throw pretty fancy language around about art, with some dazzling insider terminology, but much of it is a bluff, propping up a slender knowledge of both the art and the industry, which is in many ways hard to grasp.
Being a new collector in today’s art world is tough. And that’s why the number of buyers is falling. Every year, fewer and fewer people buy art. Were it not for a few hard-core collectors at the top end of the market who produce record prices, the art market would be in recession. In reality, most galleries close down after only a few years; most artists cannot afford to live from their practice; there are only around six thousand people who spend more than $100,000 per year on art; and pretty much every piece of art that is bought has no resale value whatsoever. Those working on the selling side of the industry, such as gallerists, auction house employees, and art advisors, barely make any money.
In spite of this downbeat picture, there has never been a time when so many people have been interested in buying their first piece of art. This book is all about how to start an art collection. It cuts through the apparent (and, in my view, unnecessary) mystique of the market and breaks down the process of collecting into systematic, logical strategies that cut through the sense that you are navigating uncharted waters.
If you don’t understand how the art market really works, you can spend year after year immersed in it, wasting a small fortune along the way, before sheer experience gives you any real insight. This book—while no substitute for experience—is a shortcut to understanding what really shapes the art market. There are three essential lessons in starting your own art collection:
1. Art is not a good investment, but artists can be. You will learn to identify who those are.
2. Collecting art is fun. I will equip you with frameworks to step confidently into the market on your own.
3. Art buyers, including you, are in a really strong position in the art market. I will explain how to buy your first piece—without overspending and without needing a huge budget. WM