How to Become Art-Smart

While motivations for buying art can vary broadly, strategies don’t. Having interviewed many of the world’s top 500 collectors and worked in the market for many years, I have observed two types of collecting strategies: buying horizontally and buying vertically.

Buying horizontally, or “butterfly” buying, means purchasing from a broad range of artists—across periods, from the ancient to the contemporary, across genres, movements, mediums and so on. In other words, it’s buying what you like, with a focus emerging retrospectively. It’s the most common strategy. Herbert and Dorothy Vogel are good examples, simply buying from artists whose work they liked and could afford. Buying vertically is the opposite. It means concentrating in depth on one artist or group of artists, often referred to as “establishing a position.” Ronald Lauder’s exclusively German and Austrian collection is a good example, as is Swizz Beatz and Alicia Keys’ collection, which focuses on contemporary living African American artists. Komal Shah, meanwhile, devotes her collection to women artists.

The right strategy for you will depend on your current collecting level. If you are just starting out, you probably won’t have a clear focus yet. Collectors will reassure you repeatedly not to worry and you will create your taste over time, and your strategy will inevitably follow. Once you have bought a few pieces and have had more exposure to the art world, your taste will become more defined, and your search will narrow. Among many top collectors, I’ve seen a repeated correlation between collecting maturity and strategy: While an early collector tends to buy horizontally, maturity shows a move toward vertical collecting, either because they have found their focus or because they decided to work with an art advisor who narrows it for them. Buying art demands a significant investment in time to see as much art as possible, and a collection focus only comes with time.

Another thing I learned from my many conversations with collectors: The best strategy for first-time buyers is to stay under $1,000. At this price point, you can’t really go wrong. Your options are either to buy directly from artists or to buy from lower-ranked galleries. If you do want to go a bit higher, you could buy an edition of a superstar artist: An edition of a work by Damien Hirst, for example, starts at $2,000. Buying an edition is a re-assuring route for many first-time buyers. You buy into a trusted brand at an affordable price, and there is at least some chance of a resale value.

The entry process is a bit like picking up a new sport. When you start playing golf, you don’t want to buy the best clubs, bag and outfit—you just need some clubs to hit a few balls. Over time, you will get a better feel for the sport, and you will notice the difference when hitting with different clubs. When you reach that point, you can start investing in better clubs that fit your playing style. With art, it’s very similar. You need to get your feet wet before you can recognize your own style and then you can begin to invest. See a lot of art, buy at the lower end, live with them for a bit and then gradually move up and spend more.

Perhaps my most crucial tip: Don’t worry about making a wrong decision with your first purchase. Every collector I have ever spoken with remembers the first piece they bought. Of all the works I own, my Rupprecht Geiger is still my favorite, and I remember exactly the moment I first put it on the wall. It was a great feeling and one of the reasons I am offering this advice: I want you to have this feeling, too.

Magnus Resch, called by CNN “the world’s leading art-market economist,” is an entrepreneur and best-selling author. He teaches art management at Yale University. This is an extract from his recent book, How to Collect Art, available now and published by Phaidon.