What happens to the value of art collections during a downturn in the economy such as we are seeing now? The answer to this question comes in two parts, buying and selling.

Buying
Are there bargains to be had in the art market these days? Despite the fact that television pundits and financial commentators seem to be urging investors to use extreme caution in entering the stock market now there probably are some good deals to be made in the art market these days despite the fact that there have also been some record sales recently (for example, the September Damien Hirst sale at Sotheby’s London.) That is, if you can afford to spare the cash. Many art dealers will tell you, if they are being candid, that business is off though quality investments in high end, blue chip works are still being completed. I would suggest that one way to look for a bargain this fall would be to attend the art auctions in categories of interest to you and follow the estimates and hammer prices being achieved. You might just find that a particular work of art by a quality artist, though not perhaps the star attraction, has few bidders, and you may pick up a work for lower than its estimate. In the private market, you should ask the dealer for some price flexibility (or perhaps more favorable payment terms) and you might just get it. If you are buying unknown artists’ works be sure you are paying only what you are comfortable living with over the mantlepiece as it could be there for a long time.

Selling
There is no easy answer to the question of whether fine art values will fall just as there is no easy answer to many of the questions being posed on Wall Street these days. Fine art, like antique cars and furniture, fine wine and other collectibles is often used by investors as a means of diversifying their investment portfolios which they believe will hold or gain value either in the long or short term. It is often the case that quality fine art will retain its value despite downturns in the stock market. Other times, however, where there is a lack of buyers art prices will decline. The value of a work of art may also decline where the prices were highly speculative to begin with – let’s call this a market correction. This is not a common circumstance, but one should be aware of it.

The difficulty with fine art is that even the best works of art are illiquid assets and are often difficult to sell to raise cash in an economic downturn or malaise. In addition to the illiquid nature of artwork, there are generally significant transaction costs involved in trading works of art, such as auction house or art dealers commissions as the market for artwork is diversified and expansive and it takes much work to match a buyer and seller. Add to this equation the element of personal taste and preference in buying or selling artwork and you can see that it is not an easy task to liquify fine art assets – but it can be done. In fact, it is done successfully every day.

Fine art could be a very good investment. The values of many categories of art such as photography or American paintings, for example, have risen significantly in the past fifteen years, and there will always be a category with such growth in value. Most importantly, there are always big names and time-honored artists whose work will sell and hold reasonable value despite turmoil on Wall Street and abroad. There are also those ultra wealthy art patrons who will continue to collect in times of economic distress as they are less effected by day-to-day economic troubles than the average or lower-level investor. The key is to purchase quality works of art and to use caution and smart buying skills whenever you buy, as opposed to speculating on the next big thing, in order to have a solid art investment portfolio.

As is the case with other investments, no one knows for sure which works of art, if any, will turn out to be goldmines for their owners. Buy what you love without overpaying and enjoy it. Investment returns are an added bonus.

Beautiful Inside My Head Forever, the two-day Damien Hirst auction at Sotheby’s, London this week, glowed despite the economic woes of Wall Street. Buyers spent over $200 million on 223 recent works by Hirst, well above the auction house’s high estimate for the one-man sale. The top three prices achieved were:

The Golden Calf, a white bullock with gold hoofs and horns preserved in formaldehyde, $18.6 million,
The Kingdom, a tiger shark preserved in a tank of formaldehyde, $17.2 million, and
Fragments of Paradise, a stainless and glass cabinet filled with manufactured diamonds, $9.3 million.

In addition to the more macabre offerings, spin paintings, dot paintings and butterfly paintings also sold well. Sotheby’s may also boast a record number of viewers to its 11 day pre-sale auction preview which served as an exhibition of Hirst’s work; 21,000 visitors came to the viewing.

We should expect to see further single-artist auctions based upon this sale’s success.

Among the various factors one details when cataloging a work of art (or recording its pertinent details) are (a) the work’s exhibition history and (b) its appearance in literature.

Exhibition history tells where and when a particular work of art has been publicly exhibited. Oftentimes savvy collectors and dealers offer to lend their works to upcoming shows at museums or prestigious galleries in order to develop such an exhibition history for the work, and they also often agree to led their works when approached by museums. It is typically an honor to have a work accepted by a museum to be included in a show of other museum-quality pieces as curators typically only accept the best examples of an artist’s work for their exhibitions. This type of exhibition often leads to a prestigious heritage for the work of art and may increase its value and notoriety which could impact its future sales price. In addition to the monetary value of such exhibitions, there is also an intellectual value in being one of the chosen works by an artist which is used to represent that artist’s oeuvre; this value is harder to measure or quantify but is nonetheless important to the history of a particular work of art and important to eh scholarly community who may look to the exhibited work of art to learn about a particular artist, period or culture.

Documenting the publications or literature in which the work of art has appeared is another important factor in detailing the history of the artwork. There are some publications which are more appropriate for historical material (such as a catalogue raissone or a scholarly journal) and others which are more valuable for contemporary works of art (such as cutting-edge art magazines or exhibition catalogues and publications dedicated to identifying up and coming artists) though all mentions of a work of art in print will be included in cataloging it. It generally helps the value of a work of art to have it written up or pictured in a major publication about the artist, so many collectors will give permission for their work to be included in a book or article. Such literary mentions or inclusions also add to the body of scholarly material available to the world and give the public access to works of art which might otherwise be hidden away in private collections for the value of a select few.

Inclusion in both major exhibitions as well as publications increase the historical value and the cache of a piece and often its market value. Such participation also often gives the public access to privately-owned works of art. Art historians thus document the work’s inclusion in exhibitions and literature as a way of recording the work’s movements over time.

A client once told me during the process of acquiring new works of art that she would not purchase a painting unless it was signed. I understood her to mean that she only wanted to buy an original, verifiable work of art as well as that she wanted to purchase the best available work by a particular artist — and that she felt that a signature on the painting would meet those criteria. If only it were so simple. I explained to my client that a signature does not always add value to a work and that there are many unsigned works of art out there which are extremely important, beautiful and valuable and to discount them simply for a lack of a signature is unnecessary.

For example, for some artists who always signed their work it would be the rare piece which was unsigned. The piece may, however, be widely accepted by experts and scholars as the work of the artist and the lack of signature may not cause a dimunition in value or uncertainty of attribution. In other words, sometimes a lack of signature does not raise a red flag.

In other cases in which an artist always signed her work and a single piece is unsigned this may present a question as to authenticity or a reduction in value – however, this is a relatively rare instance. These questions, as well, are often best put to the experts in the field, and a buyer should not always discount a painting simply because it is unsigned. It is not wrong to question a lack of signature, but the answer is not always dispositive. Exceptional works by famous artists are discovered regularly – and many of them are unsigned which is why they have remained “unknown” or unattributed for many years. Think about this… Wouldn’t it be fantastic to discover that you had purchased a very important unsigned work for very little money simply because no one recognized what it was for lack of a signature?

In addition, some artists never sign(ed) their work as a matter of personal style, so for these artists it would be best and add particular certainty and value if the work were unsigned rather than signed.

The key to all of this is that you want to look for a signature that is consistent with the particular artist’s style and in keeping with how she normally handled using her initials, signature, stamp or nothing at all. Simply saying that you will only purchase signed works may unnecessarily discount many valuable and enjoyable options. If you still have reservations some dealers will provide a guarantee of authenticity.

Buckminster Fuller (1895-1983) was an artist whose work dealt with the myriad, quotidian problems of average people, but to understand his artwork the curators of the current retrospective of his work at the Whitney Museum, thankfully, have given us a glossary of key terms (and diagrams) to help us interpret the complicated answers to the large questions the artist addressed. In simple terms, they describe Fuller’s artistic motivation as “what an individual might do to help humanity,” with visual answers spanning such fields as architecture, the visual arts, literature, mathematics, and engineering.

Though he could be considered more of a conceptual thinker, a scientist, a mathematician, a scholar and a problem-solver than what we might normally think of as an artist, Buckminster Fuller was in fact all of these things, and his ability to translate these thoughts into physical form classified him as an artist. His works of art do not take traditional forms; to use traditional methods of categorizing art projects, his “drawings” in graphite on aging paper are plans for projects, his “sculptures” are cardboard, metal and multimedia models for constructions and the occasional finished structure, and his other work could be called “installation artwork.” The difficulty art historians may have in assigning names or descriptive terms to his projects, however, was not a problem for their creator. Fuller named his projects with complicated specificity using his own terms, such as “Geodesic Dome” or “Dymaxion Car” or “Dymaxion Air-Ocean World Map.”

Fuller’s projects, ranging from energy efficient cars, housing models (such as his 1945 Dymaxion Dwelling Machine), hospital designs and other solutions to problems of living and environmental use, held at their core his belief that we need better solutions to how we use and impact our environment and how we should more efficiently allocate its resources. His dome-like structure for the US Pavillion of the 1967 Expo in Montreal, for example, was a structure which required no internal supports yet was a stable and useful structure. It was built using the fewest possible materials to enclose the largest possible internal space. His Dymaxion Air-Ocean World Map, a map of the world cut into triangles and rectangles and reassembled to create a single landmass, addresses the issue of the humanity’s commonality and interconnectedness and questions the distribution of resources (the way in which we do it versus how it might otherwise be accomplished.) Fuller’s intuitive interest in sustainability and desire for us to live with the smallest possible footprint upon the earth translated into a man far ahead of his time. Or maybe we are all way behind ours…

Buckminster Fuller: Starting with the Universe runs through September 21 at the Whitney Museum of American Art, 945 Madison Avenue, New York City. The glossary is on the Whitney’s website.