Like most dealers in the world of fine art, antiques, and collectibles, H.L. “Skip” Chalfant believes a person should buy a painting or an armoire only if he likes it–no, only if he loves it. But if this love happens to be further inflamed by thoughts that the object of affection just might appreciate in value faster than the client’s financial portfolio, then Chalfant, who describes himself as a professional gambler, is willing to give some pointers.
For an example, he says, take the chairs on which we are now sitting in Chalfant’s gallery along Paoli Pike east of West Chester. He and his son Scott pick out three and line them up for our evaluation. From where I stand, they all seem vaguely “colonial” to my untrained eye.
“They all look similar–similar backs, similar feet–right?” Scott Chalfant asks, saying each is worth five figures. “You’ve heard of the idea of ‘good, better, best’ marketing?” he asks. “If you buy the least-expensive one, you may think you got a bargain. But, as an investment, you should buy the best that you can afford,” he says. That would be the third chair, thankfully not the one I was occupying. The third one, he says, is the one most likely to hold its worth and also to appreciate the most on a percentage basis.
At a time when the stock market is more volatile than a political discussion on cable news, when certificates of deposit yield less than one percent, the art market is skyrocketing. Edvard Munch’s “The Scream” fetched a howling $120 million at auction earlier this year–a record for a painting–and 11 of the 20 most-expensive paintings purchased ever have been gaveled since the crash of 2008. Is it a bubble ready to burst? Not likely, as someone among the wealthiest is always ready to write a check.
And while you can’t “flip” paintings or antique chairs as easily as you once could houses, experts agree that art, antiques, and selected other collectibles are perhaps the safest haven for preserving and increasing a sizable segment of your wealth.
“I tell people that owning art is like renting it free,” Skip Chafant says. “You get to enjoy it daily, and, if you have to, you can sell it.” And having your investment hanging on the wall is certainly a bigger warm-and-fuzzy than owning stock in a mutual art firm.
If you’re considering diversifying your portfolio, the Chalfants and other area dealers have some free tips for art investors.
Consider Your Investment Strategy. If you are frustrated with low yields on your financial portfolio and can afford to “park” some of your money, then go for it. “That chair or that painting may end up being a few years of college tuition,” Skip Chalfant says. But if you’re looking for quick liquidity, put your money elsewhere.
Do Your Homework. “First, take time to do your research about the artist you are considering,” says Sadie Somerville of Somerville Manning Gallery in Greenville. Ask the exhibiting gallery for all the information it has on the artist, including updated biographies. Consider what galleries represent him or her, and how well they are regarded. How often does the artist exhibit? Have there been any museum shows, or is the artist represented in museum collections?
Look For A Buzz. “Art appreciates if it is being promoted,” Skip Chalfant says, “and that demand is helped if the gallery is constantly promoting the artist.” Artists represented by galleries in two or more different regions are more likely to “have been heard of” by dealers and art appraisers than those represented by only one local dealer.
Check The Condition. “I always tell people to look for two things first,” says Fred Carspecken of Carspecken-Scott Gallery in Wilmington, “and those two things are condition and provenance.” Something that is damaged or distressed automatically loses some of its value. “We use the 50-50 rule,” says Valerie Malmberg of Greshville Antiques and Fine Art in Boyertown, “and that is 50 percent of what a customer pays should be because they love the piece. The other 50 percent is everything else, but especially the condition of the work.”
Be Sure It’s The Real Deal. The Chalfants agree with Carspecken that you need to be careful not to invest in fakes and forged art. But for that worry to kick in, in most instances the buyer has to be considering a work that is selling for six or more figures. “Most artists who are good enough to fake old masters can usually get that much from their own works,” Skip Chalfant says, although he does allow that modern abstract artists such Willem de Kooning may be easier to fake. “With abstract artists, you practically have to have a photograph of the artist in his studio doing the painting.” Dealers of high-ticket works are usually able to provide a trail of information linking painting to artist. Be wary of Picassos found in the attic of his former gardener.
Buy The Best You Can Afford. As illustrated by the Chalfants and their three chairs, Somerville says she advises people to “find the best that they can find within the budget they feel good spending. This may mean that someone makes fewer purchases,” she points out, “but the ones they do make are for higher caliber works. In this market, people generally gravitate to buying the ‘cream of the crop’ paintings.”
“You’re Not Just Buying An Artist, You’re Buying A Painting,” Scott Chalfant says. “Every artist has bad days and even bad periods.” Many new collectors don’t realize that artists often paint in several styles as they evolve, but only one style becomes popular. Some paintings executed toward the end of an artist’s career may not be technically as good–poor brushstrokes, for example–as those done in their prime.
Dead Artists Are Generally Safer Investments. It’s sad, but true. Paintings done by all those starving artists are worth more once they’ve passed on. (One artist I know says he’s fortunate to be represented at a gallery that mostly has paintings by “well-known dead men.”) Nevertheless, young investors who buy talented and well-credentialed young artists often have something valuable to pass along to the grandkids. Carspecken guesses that a painting by the younger Mary Page Evans, whom he represents, may now be worth five times its original selling price. Somerville has watched her artists, including Peter Sculthorpe, similarly appreciate in value during their careers. Plus, there is the pleasure of being able to watch “your” artist flourish and become more collectible as you both grow older.
Pay Attention To What’s Hot. “In antiques, what’s been hot for the past 10 years is folk and painted furniture,” Skip Chalfant says, “and they are still pretty hot.” Somerville is happy with the results of her gallery’s “American Masters” series that has been exhibited annually for the past three years. “American Masters showcased works by Milton Avery, Childe Hassam, Man Ray, Hans Hofmann, John Singer Sargent, Georgia O’Keeffe, Mary Cassatt, N.C. Wyeth–all well-known artists of the late 19th and early 20th century,” she says. “The paintings market is very strong, as is jewelry and gemstones,” Malmberg says, “and we’re seeing a glimmer of renewed interest in furniture and clocks.”
Ask Your Dealer For Advice And Opinions. “If people ask me about antiques or art, I’m happy to give them what knowledge I have,” Skip Chalfant says, but adds this doesn’t include formal appraisals. There’s a fee for that.
Trade Up. Many dealers are willing to let you trade in that piece you bought from them for a higher-priced work as your eye (and wealth) improves. But you should ask about their trade-in policies before you buy.
Buy Insurance For Your New Investment. “Insurance is cheap,” Skip Chalfant counsels. Your treasure may not be stolen, but it could get damaged by any of a number of occurrences.
Don’t Ask Your Financial Advisor For Approval. Most likely, you won’t get it. Would you want someone to take $100,000 out of a portfolio you are managing for a percentage of its total worth? Buy your art first, then break the news to your financial adviser.
For, as Somerville says, “With art purchases, people can have immediate satisfaction–the pure enjoyment of the art–and they know that they will still have the art in the end, even if the art market declines.”
But “In the back of everyone’s mind is a little ‘itch of investment,'” Malmberg concludes.