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May 21, 2013 10:01 PM

Art As An Investment

Sioux Falls, SD

You admire the painting in the gallery, but should you buy it for an investment? 

Art investment is big business.  The art market has been in recovery after tanking with the rest of the economy in the recession, but investing in art can be daunting. 

Artist Nancyjane Huehl is known for her prairie landscapes and is fortunate enough to make a living doing what she loves.  She also collects other artists' work. 

"At times I've bought on impulse or in the moment," Huehl said.

Sometimes she gets lucky. An original signed Harvey Dunn book she once bought has tripled in value. Huehl has also seen the value of North Dakota artist Sheila Rieman's painting rise as well.

But how do you know your purchase will go up in value? 

"You don't.  It's just like if you buy a stock, you see what's out there before you and you have an idea, it's not a guarantee it will grow, Huehl said.

Just like the stock market can go down, art can also go down in value and it's not regulated like the stock market. That's why Huehl suggests buying only what you love. 

"It's risky, it can be, but there's actually a global index for art. It's called the Mei Moses index based out of Hong Kong. It's a lot like the S&P 500," certified art appraiser Kara Dirkson said.  

Dirkson is South Dakota's only certified art appraiser and has this advice for investors.   

"It needs to fit two special characteristics: one, you have to love it; two, it needs to have market viability," Dirkson said.

Buyers should also carefully consider the status of the artist and the demand in the market. 

"Art, like real estate is something that if you buy it wisely, it should keep or hopefully increase in value over a long period of time and that includes the ability to resell it," Dirkson said.

Dirkson is making it easier for collectors and artist to sell their art through her new website, Midwest Fine Art Exchange. 

"Art can only hold its value if you can resell it later and that's been a completely vacant part of the art market around here," Dirkson said.

Another alternative, donate it to a charity and take the tax deduction. 

Click here to visit the Midwest Fine Art Exchange's website.

Click here to visit Huehl Studios.

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