Art Experts Warn Buyers: Love It, Not the ROI

The art market presents a stark financial reality for new buyers: the stock market has vastly outperformed art over the last decade. An analysis of annualized returns through 2024 indicated that art produced some of its worst 10-year returns in seven decades. Despite this underperformance, 2026 has seen a surge in younger buyers entering the market. Experts suggest that success depends on understanding the market structure rather than chasing quick profits.

Canice Prendergast, an economics professor at the University of Chicago, emphasizes that the art world relies heavily on insider information. He notes that outsiders have little hope of catching the next wave of hype early. Value typically increases as artists move from lower-tier galleries to mid-tier ones and finally to auction houses. Prendergast points to Louis Fratino as a recent example. His work moved from mid-tier gallery David Fierman in New York to the mega-gallery David Zwirner. This shift coincided with a 20x increase in the price of his paintings, a jump that took years to unfold.

Magnus Resch, an art economics professor at Yale University, advises collectors to manage their expectations. He stated that most art is not a good investment and that buyers with limited budgets are unlikely to see a financial return. He recommends buying art one loves from local galleries or artists found on Instagram. Resch suggests treating the purchase as an investment in oneself, the artist, and the gallery rather than a financial asset. He advises assuming the money will never be recovered.

For those with specific budgets, Resch offers tiered advice. At $5,000, buyers should look for prints or works on paper by established artists, ideally at auction. At $10,000, original works in contemporary art day sales at major auction houses become an option. At $100,000, the focus should shift to artists represented by leading galleries with major museum exhibitions. Resch prefers buying one exceptional work for $100,000 over five mediocre ones for $20,000 each. He urges buyers to compare gallery and auction prices just as they would when purchasing a $500 television.

Georgina Adam, editor at large for The Art Newspaper, cautions against buying on a whim. She recommends studying the artist first and finding dealers with a proven track record. She advises against buying from eBay unless the item is strictly for decoration, noting that fakes often come with fake certificates of authenticity. Adam suggests that higher price points offer clearer research trails for provenance and resale values, while lower price points rely more on personal enjoyment.

Roman Kräussl, a finance professor at the Bayes Business School in London, notes that art offers lower risk-adjusted returns than financial markets but can serve as a hedge. He highlights the high costs associated with buying, including buyer's premiums, shipping, insurance, and storage. Kräussl encourages collectors to engage with culture rather than trying to beat the market. He advises going to small events to meet artists and develop one's own taste, rather than relying on social media trends. He notes that the biggest payoffs are intellectual and cultural, not financial.

The 2026 Art Basel and UBS Survey of Global Collecting found that painting remains the most popular medium for high-net-worth collectors. It accounted for 76% of buyer participation and 31% of total fine art expenditure. Sculpture followed with 15% of spending, while works on paper and digital art accounted for 10% and 9% respectively. The survey of 3,100 collectors across 10 markets indicated that most buyers conduct their own research before purchasing.