“The first point of reference should be yourself and decide whether you know enough or know anything [about art]. If you don’t know anything, you need some advice. You can start with a gallery of good reputation that you know and can establish how long they’ve been in business. Those galleries generally would provide you with a good start, good advice right from the beginning,” Stefan Hundt, curator and head of art advisory service at Sanlam Private Wealth, told CNBC Africa.
Hundt added that the art market is significantly diverse with historical and contemporary works, which operates in auctions, galleries and with agents.
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“Generally, what one can perhaps say is that if you don’t know what it’s about, then you’re treading on difficult terrain. You’ve got to do your research and you’ve got to find out how those different aspects of the market operate,” Hundt explained.
“There are specialists in every area of that market, and in a sense you’ve got to get them to assist you, but you can inform yourself quite well about [art].”
Hundt added that if one decides to go into historical art in particular, places for purchase of this type of art tend to be in auctions, and also carry a hefty price.
“There you’ve got to be careful because in essence you have to make sure about what you buy. The [auctioneer’s] commitment is to sell the work for the seller, and you’ve got to know what you’re doing when you go into an auction,” said Hundt.
“You have to know which auctions are worthwhile to go and buy those artworks. A good auctioneer, and a number of up and coming auction houses, all have a strong reputation that they’ve got to keep going. In that sense, the product that they sell has to meet the requirements of themselves but also of clients.”
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Unlike equities, art also needs to be physically taken care of, which could come at an extra cost, but if buying and selling on one’s behalf ensures that the capital gain on the artwork is not taxable.
“If you’re shrewd and you know your business, you can [have] incredibly high returns on an artwork that is still well-selected at the right time and sold at the right time,” said Hundt.