10 Ways to Lose Money in the Print Market

A screenprint by Andy Warhol depicting a Campbell's Soup Can against a white background with a label reading “Chicken Noodle Soup”.Campbell's Soup I, Chicken Noodle Soup (F. & S. II.45) © Andy Warhol 1968
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In this exclusive interview, Charlotte Stewart, Managing Director of MyArtBroker, sits down with Richard Polsky, Pop Art authenticator and author of I Bought Andy Warhol and I Sold Andy Warhol (too soon). Together, they answer the question most art collectors and investors wish to avoid: how to lose money in the art market.

Anyone serious about print collecting can’t help but think about investment. If you’re spending $5,000 or more on an original print, you expect it to hold its value, and hopefully appreciate. You certainly never think in terms of losing money; nobody buys art to show a loss. Yet, the reality of the art market is that not everything goes up in value. Some art goes down and many purchases end up being worth approximately what you paid for them.

It’s important to note that the below advice is for retaining and returning on your investment. Buy what you love if you’ve no other agenda than pure joy - you can’t lose.

1.

Richard: Settling for Less than the Best

The best collecting advice anyone ever gave me is to buy the best. Even if it’s a financial stretch. It’s the work where you have to ‘break the bank’, in order to afford it, that usually winds up appreciating the most. The finest prints by the top printmakers, such as Jasper Johns, Andy Warhol, Roy Lichtenstein, Ed Ruscha, and David Hockney, consistently hold their value and offer a consistent path to appreciation. They also offer the greatest financial protection if the art market enters a recession. During tough times, it’s always the middle market that gets hit the hardest.

The second-best piece of collecting advice that I ever heard was to find a ‘top ten’ print by a major artist and agree to pay the current market price — in the long run you’ll be happy you did. Remember, there are no ‘deals’ in the art market. Everyone knows what the ‘good stuff’ is and what it’s worth. Be prepared to pay whatever you have to in order to buy the best.

2.

Charlotte: Ignoring Condition Reports

When purchasing prints, especially older or limited edition pieces, it's crucial to pay attention to their condition. Any dealer or gallery unable to provide one or a thin one, is not to be trusted. Prints can deteriorate over time due to factors like exposure to light, humidity, improper storage, or mishandling. There is nothing wrong with buying something that has condition issues, but it will be reflected in the price, and not having one, and going on the promise of ‘excellent condition’ is not enough. There is a grading system in this market, and ‘good condition’ does not mean excellent and so on.

Neglecting to thoroughly review condition reports or skipping professional appraisal services, offered by many - including us - as a fundamental ‘must’ and therefore free service for any print you’re looking to purchase, might lead to investing in prints with hidden damages or imperfections, ultimately diminishing their value. Not all condition issues can be seen by the naked eye, or on a framed print, or indeed over photographs. The work needs to be defamed, inspected and then reported on.

3.

Richard: Buying Prints On eBay

One of the great temptations in the print market is to ‘try your luck’ on eBay. People have often referred to the auction houses as the art world’s casinos. Well, if Sotheby’s and Christie’s are a casino, then they’re Monte Carlo and eBay is the Carnival Cruise Line. eBay’s lack of professionalism, and complete disregard for scrupulous dealings, is something to behold. For example, the number of fake Keith Haring Subway Drawing listings could fill a stadium. Allegedly, eBay handles customer complaints by occasionally offering a refund, promising to ‘do better next time,’ and then reverting back to the same behaviour. Getting caught is simply the cost of doing business.

Just type in Andy Warhol, Jean-Michel Basquiat, or Keith Haring and you will be amazed at the thousands of offerings by each artist. While the majority of them are reproductions or posters (passed off as original prints), you will also find a handful of genuine graphics. If by chance you come across an authentic Andy Warhol print, say a Diamond Dust Shoes, be prepared to pay approximately double retail. Just like Nancy Reagan famously said in her anti-drug messages, during the Ronald Reagan presidency, when it comes to buying prints for your collection on eBay, ‘Just say no’.

“One of the great temptations in the print market is to “try your luck” on eBay. People have often referred to the auction houses as the art world’s casinos. Well, if Sotheby’s and Christie’s are a casino, then they’re Monte Carlo and eBay is the Carnival Cruise Line.”
Richard Polsky
4.

Charlotte: Overlooking Edition Size and Authenticity

Understanding the edition size and authenticity of a print is paramount in determining its value. Limited edition prints, where only a set number of copies are produced, generally hold higher value compared to open editions. However, even within limited editions, variations such as artist proofs or printer's proofs, or trial proofs, and hand finished versions exist, affecting scarcity and value hugely. Investing in prints without verifying their edition size, authenticity, or provenance can result in overpaying for mass-produced or counterfeit pieces.

The only way to really understand what you’re being offered is to speak to a specialist, there are things they have seen on the market that you can not pull up easily online and compare. Using a specialist print dealer for example is an excellent way of verifying, and ASK, always ask all the stupid and less than stupid questions you need to. Really know what you’re buying and why the price is the price.

5.

Richard: Buying Too Deeply into Atypical Subject Matter

Whilst personally rewarding to own something a little atypical for the artist can be really rewarding it rarely pays off as well from an investment perspective. There is a reason why some artists make it big. Usually, it comes down to being an innovator and contributing something new to art history. This contribution can be traced to a specific body (or bodies) of work. With Andy Warhol, you had the Campbell’s Soup Cans and the Celebrities. With David Hockney you had the portraits and anything that depicts a swimming pool. With Roy Lichtenstein, you had the early comic book imagery. Eventually, each of these artists created prints that captured the spirit of their history-making canvases. Obviously, these are the prints that you want to pursue. When someone walks into your home and can immediately identify a Warhol Marilyn, a Hockney portrait of Celia, or a Lichtenstein The Melody Haunts My Reverie — you know you’re on to something.

Conversely, not everything a great artist produces is great. Even Picasso had his down days; probably 20% of his work is of no consequence. The same holds true for contemporary artists. If you acquire an Andy Warhol Fiesta Pig, you may succeed in your mission to own a Warhol. But you will have failed in buying a work that captures the reason why Andy Warhol matters.

6.

Charlotte: Neglecting Market Trends and Artist Reputation

The art market is dynamic, influenced by changing tastes, trends, and the reputation of artists. Failing to stay informed about current market trends or overlooking the reputation of artists can lead to purchasing prints that might not appreciate in value as expected. Emerging artists or niche styles may have limited demand, while established artists with enduring appeal tend to hold better investment potential. Researching market dynamics and artist reputations can help avoid investing in prints with limited marketability.

You can keep on top of this via MyArtBroker by exploring our Investment Reports on each artist, and if you’re ready to go, just speak to the team. This is their number one role for our clients.

7.

Richard: Buying a “B-Grade” Work by an “A-Grade” Artist

Never buy a second-rate work by a first-rate artist. For instance, among Keith Haring’s finest prints are his Fertility Suite. These serigraphs capture the artist’s essence; superb graphic design, glowing Pop colours, and content that sends a positive message.

Yes, prints from this series are expensive and hard to come by. But why on earth would you succumb to the temptation of purchasing something he’s hardly known for? It’s not that works are lesser, or bad, but works that fall in an artist’s edge series, hardly known of, squarely fall into the category of a “B” work by an “A” artist.

8.

Charlotte: Underestimating Market Liquidity

Market liquidity refers to the ease with which an asset, such as a print, can be bought or sold without significantly affecting its price. Prints with high liquidity are in constant demand and can be quickly bought or sold in the market without substantial price fluctuations. Conversely, prints with low liquidity may have limited buyer interest or face challenges in finding a willing purchaser, especially during economic downturns or shifts in market preferences. Underestimating the importance of market liquidity can result in difficulties selling prints when needed, potentially leading to prolonged holding periods or selling at a discount, ultimately impacting returns on investment.

The demand for prints is just as important as the value at the current moment. Do not rely on auction results alone. It is for this exact reason we build the trading floor, and each artwork on the site shows the demand in our network, as a sample of a very dedicated and engaged collector base, so that you can see the interest and demand or indeed supply, in the market at any given time.

“Underestimating the importance of market liquidity can result in difficulties selling prints when needed, potentially leading to prolonged holding periods or selling at a discount, ultimately impacting returns on investment.”
Charlotte Stewart
9.

Richard: Buying a Print Based Purely on a Certificate of Authenticity

It goes without saying that one should only buy prints that are authentic. Some sellers try to capitalise on your concerns by offering a ‘certificate of authenticity’ with each purchase. But when you get right down to it, what does this piece of paper really mean? Sellers who offer these certificates do so from a position of weakness. Guaranteeing a work is genuine is not based on a piece of paper authenticated by the same organisation that’s trying to sell the work to you.

Serious sellers of important prints don’t issue these certificates. Instead, they rely on their reputations to guarantee authenticity. An established print dealer will give you an invoice, which in effect is saying, ‘We stand behind this work of art.’ It’s just common sense that if you transact business with galleries, private dealers, or online platforms that have been in business for many years — and have established impeccable reputations — they will guarantee the authenticity of anything they sell you.

10.

Richard: Buying Fractional Shares of a Print as an Investment

The latest craze in the art market are businesses that sell fractional shares of blue-chip paintings as investments. The basic concept is analogous to the stock market — which sells shares of a corporation like Apple. The fractional shares companies offer you the opportunity to own a small percentage of an expensive painting like a Jean-Michel Basquiat canvas. They acquire the painting, sell shares in it until the offering is fully subscribed, hold it for a while, and then hopefully sell it at the opportune time. At that point, they distribute the profits to their shareholders.

On the surface, it sounds intriguing. The basic concept allows the small investor to participate in owning a multi-million-dollar work which they could never afford on their own. This business model is designed to appeal to the less sophisticated investor. Anyone who knows anything about the art market understands that buying art is more of an individual experience and that profits are hard to come by — and far from assured. The fractional shares art companies play down their high management fees (which guarantee them a profit). They also make lofty claims about how everything in the art market goes up in value by showing you charts with ‘slanted’ data. Since this new business model is in its infancy, and most companies are only in the acquisitions stage, we’ll see what happens when they go to sell.

Richard Polsky is the owner of Richard Polsky Art Authentication and Richard Polsky Art Fraud Prevention which specialise in authenticating the work of seven artists including: Andy Warhol, Jean-Michel Basquiat, Keith Haring, and Roy Lichtenstein — www.RichardPolskyart.com, you can contact him directly, or through MyArtBroker at [email protected].

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