What are the Six Myths of the Art Market?

1. All art has value.
2. Art values always appreciate.
3. Art is a good investment.
4. You can always resell your art and get at least as much as you paid.
5. The bigger the name of the artist, the more valuable the art.
6. When an artist dies, the value of his work goes up.

“At the end of the day, I don’t think anyone really knows what makes the art market work.” If anyone does, it should be the man who made that statement to a convention of personal property appraisers. Bruce Wolmer is the Editor-in-Chief of Art & Auction magazine and it’s his job to analyze the art market and explain its workings and trends to the rest of us.

As an independent appraiser I have been researching the art market for over thirty years and I don’t have answers for Bruce, except possibly my observations about the myths that pervade the market like mycelium. These are the things “everyone knows” and repeats—especially when selling art—but that are rarely true.

Actually, like all myths, they are based on some reality. In this case, however, that reality exists only at the top of the international market where the most valuable artworks are traded. They may apply to the most desired fine art, but never to decorative art. They are the result of massive auction house publicity, journalistic clichés, dealer hyperbole and the general cluelessness that Bruce Wolmer referred to.

As we take a look at the six myths that drive much of the art market, test your own beliefs.

Art Has Value. That is, art has monetary value simply because it exists. Not true. Art only has monetary value if someone is willing to purchase it. Many people who have had the sad task of administering an artist’s estate have found out they have been stuck with a large number of artworks for which there was no market.

Art Values Always Appreciate. Nothing in any market always appreciates. The art market has the same ups and downs as any other market and the value of artworks often reflects short-term fads, dealer hype and fashion.

Art Is A Good Investment. This is the most misunderstood concept of all. Art is a terrible investment, unless you’re buying the best works of the international superstars. “Investments” must follow certain rules, such as being traded in a regulated market. Believe me, the art market is among the least regulated markets in the world, after the international arms trade. “Investments” must have reported track records and must be reasonably liquid. Remember too, you cannot invest in the work of a living artist. That is speculation. Recent events in the market for Thomas Kincaid art demonstrate this.

You Can Always Resell Your Art And Get Back At Least What You Have In It. Where? How? There is simply no venue for selling most art. Remember the old saying that “you buy art retail and sell it wholesale”. Peggy and Harold Samuels were right when they advised, in their book about collecting art, not to buy paintings that don’t fit under your arm; that is where they will be if you ever want to sell them, as you go from gallery to gallery.

The Bigger The Name Of The Artist, The More Valuable The Art. That perception is why there are so many fakes attributed the Miró, Chagall, Dalí, and Picasso. It also explains why some people are willing to pay big bucks for lousy artworks attributed to a “name” artist. And don’t forget, not all authentic artworks are signed, but all fakes are.

When Artists Die, The Value Of Their Art Goes Up. This is everyone’s favorite, but it just ain’t so. With very famous artists, the postmortem market is usually flooded with works people are hoping to cash in on. With all other artists, the sad truth is that they and their work will soon be forgotten, unless they have a “keeper of the flame”, stoking the fires of their market with exhibitions, publications and heavy marketing.

These myths, which are repeated over and over as “truths” that everyone knows, simply ignore or bypass the only reason most of us should have for buying a piece of art—we love it and want to live with it. A painting, sculpture or print should never be thought of as a future college education or retirement fund.

As the internationally recognized Salvador Dalí expert, I have had the same heart-breaking experience literally hundreds of times. Sitting in a client’s living room, I tell them the art they bought is fake and valueless. They look at me with shock, and sometimes fear, and tell me they had used their son’s college fund or their retirement savings to “invest” in art that they were assured would double or triple in value by the time they needed the money. Often they don’t even like it. They fell for the myths that drive so much of the art market.