TIPS FOR COLLECTORS

Many investors, seeking alternatives to the stock market, are opting for asset-based investments, such as art. “It's a great addition to a portfolio,” says Paul Henderson, a 35-year-old district attorney in San Francisco, California, and an enthusiastic collector of African American art. Although profit wasn't the primary reason Henderson began collecting six years ago, it played an integral role in his selections. He paid for Returning Home, a signed block print by Hale Woodruff that he later discovered was worth an estimated .

Although collectors say there is tremendous potential for growth and gain, it is not a short-term investment and may not yield as high a return as works by non-African American artists.

For instance, old master paintings have traditionally been the blue-chip investments of the art world. “If you take a piece like the Thankful Poor [by Henry O. Tanner], which Bill Cosby bought in 1981, during that same period a piece by someone like Van Gogh would have gone for maybe 50 times that amount,” says art appraiser Marshall Grigsby. The president & CEO of Grigsby & Associates began his career after cataloguing his 84-year-old father's artwork and finding there were few experts familiar with African American art. While a disparity still exists in the value of works by African Americans, “there is an awakening awareness of [the] importance [of African American artists],” he says.

“My work has increased in value,” says Leroy Campbell, an artist whose early career found him selling his work on the streets of New York City for . Today, after twenty years of awards, acknowledgements, and a generation of Neckbone characters, Campbell's works are priced up to ,000 and can be purchased in many galleries, including his Fort Greene brownstone in Brooklyn, New York.

When it comes to valuing your artwork, Grigsby advises carefully choosing the works you have appraised since fees can run as high as per hour, which is sometimes more than the piece is worth. “Be leery of someone who can give you a quick estimate because the foundation for appraising a piece is knowing the market as it exists at that particular point and time, and that is not a constant.”

When investing in African American art, it's not easy to speculate what will endure and what [is] a momentary fad. “The only way you can be sure that a piece is going to retain its value is to go with artists who are well-known and established,” says Grigsby.

If you're ready to start a collection, do your homework. Resources like Hampton University Museum's journal, the International Review of African American Art (www.hamptonu.edu/museum/publication.htm) and the annual National Black Fine Arts Show (www.nationalblackfineartshow.com), which hosts lecture series that offer practical advice as well as an academic foundation, are good starting points. Art books, visits to museums, galleries, art shows, and networking with collectors are also great ways to gather information.

Both Grigsby and Henderson warn against buying art exclusively for investment. For a win-win situation, it's wise to purchase art that you appreciate, regardless of the market.

The Artist's Role within your Investment Strategy

Of course, the artist plays a vital role in the scope of a work of art. Yet, in addition to the quality of the piece that an artist creates, other factors also carry weight in terms of the artist. He or she is key to your art investment strategy. Primarily, the basic factors including your collecting goals, enjoyment for a piece, interest, and  quality should dictate your decision to buy a work of art. Make certain that the work meets the standards for presentation and condition and then, assess the other criteria.

As for the artist, the artist's general background is important. This certainly impacts the value of the piece. In basic terms, this means that the artist's background or  his or her training and art teachers, degrees completed, and other credentials are important. Points such as an artist's exhibition record (how often and where do they show their work?), and the sales or commercial record  come into play when determining value and investment return. Most of us understand the concept that, in   simple terms, a work of art by an established artist is worth more than a piece by a lesser known artist. For instance, a Van Gogh usually commands higher prices at auction than a work by someone less well known, like Joe Smith. This is a simple concept.

Art is like anything else that can be marketed. We want the "brand name" or the popular artist's work or at least we are made to believe we want it through marketing. This is why we have to conduct some research before we buy.

Best Way to Get the Best Art:

Know the Artists

Most artists have special selling arrangements with preferred clients who have been buying for years.

 In order to build customer loyalty, artists show preferential treatment to their best clients. Just like airlines offer their best customers bonuses like first class upgrades or the corner coffee shop gives every tenth cup of coffee free, artist offer a 'frequent collector' first right of refusal.

Much of the best art that comes onto the market changes hands privately and never makes it onto the gallery walls. In the realm of established galleries and seasoned collectors, most of the major players already know each other and collectors' tastes, specifications, preferences, and budgets are pretty much a matter of record. When new works are created, artist then contact the most likely buyers. Selling art with a phone call makes far more sense than investing time, effort, money, and uncertainty to hang it, market it, and wait for likely buyer.

In any event, if you respect the artist and his works, do what you can to cultivate the relationship. Respond when he contacts you, buy when he offers art that you like, pay according to whatever criteria the two of you agree upon and with minimal negotiating, and continue to advance in your collecting. Eventually you'll acquire your 'frequent collector card' and find yourself at the head of the line for fresh new arrivals.

Art Investing: Dead or Alive?

We are also aware that in most cases, the price and value of a work of art by a dead artist is higher than that of a living artist. This is another simple point that makes sense to most of us since it's hard to get a new Joe Smith painting once he has passed on.

Let's dispell some myths. The smart collector doesn't get hung up on this point about dead versus living artists. The smart collector considers the quality of the work and the fact that the contemporary art market is much more forgiving than the old guard. If you like a work of art by a living artist, you have some good options in terms of price and availability. This is not always the case with long-established, often dead artists since there are usually fewer works from which to choose and very little room for price negotiations.