How to start an art collection on any budget

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The decision to invest in any collectibles market should start with curiosity and love, and buying art is no exception. While the rarest works of art in the world have sold for hundreds of millions of dollars, for most collectors, art is unlikely to match the returns offered by traditional investment markets. A recent analysis of 10-year annualized returns including data through 2024 showed that the stock market vastly outperformed art. True, it has been an incredibly strong bull market on a historical basis, but the performance from the art market over the same time period produced some of the worst 10-year returns in seven decades. As with any asset class experiencing a downturn, some experts see the recent weakness as a buying opportunity. The 2025 market did see some improvement, and 2026 has been an ever better year to date, with younger buyers showing up in a big way. But experts also stress that the art world is the least transparent market imaginable, with significant "insider information" involved in anticipating big jumps and the next major wave of hype. "What I tell people is that there is so much inside information in the art world — for instance, who has bought a particular artist or who is getting a museum show in two years — that if you are an outsider, you have little hope" of catching the next big wave early, said Canice Prendergast, economics professor at the University of Chicago, who also oversees that Chicago Booth School of Business Harper Center's contemporary art collection, which houses more than 650 artworks. It is important to understand that generating a repeatable investment strategy can be difficult — if not impossible. "Most art is not a good investment," said Magnus Resch, who teaches art economics at Yale University and is widely recognized as a leading art market expert. "If you're buying on a limited budget, you're unlikely to see a financial return," he said. Still, despite the complexities and opacities associated with art, experts advise that for anyone wishing to enter the market there are some basics to understand — from how to research art, to the various mediums, to what to buy at various budgets, and where to buy — before getting started. Learn about galleries, auctions, and how artist values rise Prendergast said a fundamental understanding of the market begins with knowing it is divided in two. The primary art market consists of galleries and the secondary market is typically auctions. And significant increases in value typically occur as art moves from one level of gallery to another and finally to auction. "It's in anticipating moves between levels that most of the action is," Prendergast said. "There are many collectors trying to work out who is going to turn into a star [and] the key intermediaries here are galleries," he added. Buying in the primary market first requires the squishy "knowing something about art," he said, but also understanding the hierarchy of galleries. The big moves happen as relatively undiscovered talents appear in galleries that have a history of discovering and elevating artists. Inside such jumps — from a lower tier gallery to a mid-tier one — there can be big, embedded returns. Prendergast gave as one recent example mid-tier gallery David Fierman in New York City that showed artist Louis Fratino several years ago. Fratino's work jumped to New York-based mega-gallery David Zwirner, and is currently featured in a London show. Along with that jump came a 20x increase in the price of Fratino's paintings. Such moves, Prendergast said, are precisely the type of play investors dream about, but the reality is that they take a long time to unfold and are exceedingly hard to predict. "The thing that people overlook is actually mid-career artists," Prendergast said. "My advice would be to go to a major art fair – at every art fair, the galleries they put in the corners are the up-and-comers," he said. Keep it local as a beginning collector Resch says that the difficulties in the art market should not necessarily discourage new collectors. Rather, they need to enter the market with clarity of purpose, as well as realistic expectations and aims. "Buy art you love from local galleries, artists you discover on Instagram, or art fairs where artists exhibit directly," he said. The limited possibilities for investment success can actually emphasize other, more essential advantages to the endeavor: "Assume you'll never see your money again. You're not investing for financial returns. You're investing in yourself, the artist, and the gallery," he added. Roman Kräussl, professor of finance at the Bayes Business School in London who specializes in art as an alternative asset class, says that when it comes to art, the greater opportunity is to engage with culture than to beat the market. Kräussl's research-based conclusion is that for the most actively engaged investors, art will provide a lower risk-adjusted return than financial market investments, but it can still be a positive return, and it can serve as a hedge against financial market risk. But when considering all the costs and fees associated with buying art, he says picking "winners" is critical. Buyer's premiums, shipping, insurance, framing, storage if necessary, and resale fees, all factor in the overall return on investment. This offers another reason to stick to the galleries and fairs over auction houses, since the atmosphere involves more opportunities for social interaction with other collectors and even the artists themselves. "Art is the most illiquid, nontransparent, opaque investment you can engage with. But it is also tons of fun," Kräussl said. The enrichment is more likely to be to yourself as a person, not to your bank account, with the big payoffs coming from "intellectual, cultural, and human-relevant perspectives." "You will meet the most interesting people of your life," Kräussl said. "Do not 'Spotify' art," he said. "Go to small events. See the artists. Experience. And if you like, go for it. If not, search further. But do not wait for someone to tell you what to buy. Develop your own taste," he said, "and then trust it." How to invest on a $5,000, $10,000 and $100,000 budget Traditional mediums still dominate in the art market. Painting remains the most popular medium for collectors, according to the 2026 Art Basel and UBS Survey of Global Collecting, which focuses on the high-net-worth end of the market, surveying 3,100 collectors across 10 markets. That is measured by both participation (76% of buyers) and value (31% of total fine art expenditure). Sculpture was the second-largest area of spending (15%), followed by works on paper (10%) and digital art (9%). But that may not necessarily be the best place to start for everyone, and one point emphasized by multiple experts is that the smarter plays happen in the less-hyped areas. Hype can drive extreme pricing disparity and inflation, and it is often evidence that there has already been movement behind the scenes that preceded all of the hype. In other words, hype may indicate already being too late to the table. Another way to approach the art market, according to Resch, is through a focus on prints and editions — multiple, authorized copies of an artwork from an original source — which he says are often overlooked. "They offer access to blue-chip artists at a fraction of the price," he said. That contrasts with investments in emerging artists, which can be riskier. "An artist can sell out every gallery exhibition and still have virtually no resale market," he said, "so don't believe in popularity. Instead, check if an artist has an auction market." Resch says for any individual "willing to gamble at $5,000," he would look for prints or works on paper by blue-chip artists, ideally at auction. At $10,000, he says original works in contemporary art day sales at major auction houses are an option, though works of art on auction at these events can start at much higher prices. At $100,000, Resch says the focus can turn to artists represented by leading galleries who have exhibited at major museums. "I'd rather buy one exceptional work for $100,000 than five mediocre ones for $20,000 each," he said. But no purchase should be made without doing considerable homework: "Visit galleries, research artists, and compare gallery and auction prices. People compare prices when buying a $500 television. Why wouldn't they do the same when buying a $50,000 painting?" Georgina Adam, editor at large for The Art Newspaper and a lecturer at Sotheby's and Christie's in London, said liking a piece remains an essential criterion, especially at lower price points and in areas of the art market that aren't particularly strong. That can lead to buying prices that are lower, but the ability to resell will also be very difficult, she said, adding that many pieces in 19th-century painting, as well as antiques, silver, and porcelain, feature these dynamics. "While it is a sum, $10,000 is not life changing if you lose it, but from the higher price points up, then readers will at least want the art to hold its value." Higher price points are also more typically associated with the benefit of auction records and clearer research to track pricing, provenance, and resales, according to Adam. How to research the art market and choose advice sources Whatever you buy, "Don't buy on a whim," Adam said. "Study the artist first." Such study can occur with the assistance of a trusted advisor, but even taking on an advisor takes research, Adam said, who is herself a member of the Association of Professional Art Advisors. She also cautioned that while specialists at auction houses and dealers will be knowledgeable, they all have "skin in the game." "Look for dealers who have a proven track record, and belong to a professional association with a code of ethics. Inclusion in a well-known fair (Frieze, Armory, et cetera) is a sign of seriousness," she said. "Fairs enable the buyer to look around in a less pressured environment and get prices. Galleries will generally be happy to talk about their artists," she said. One platform she strictly advises serious collectors to avoid is eBay. "Don't buy art from eBay, unless you just want a poster that goes with your décor. There are plenty of bad actors out there. Remember that fakes can be accompanied by fake certificates of authenticity," Adam said. Christoph Noe, the co-founder of Larry's List, which covers the current art collectors market, said direct relationships with artists, studio visits, making collections public, and openly rejecting hype and FOMO (fear of missing out) buying are all important practices for collectors. "Notably, not one collector in our listing mentioned TikTok, YouTube or LinkedIn as relevant to their collecting practice/research," he said. According to the Art Basel/UBS report, most collectors did their own research before buying, with 72% undertaking moderate or significant research, and that figure rising to 80% among Gen Z collectors. The most commonly used external sources of advice were auction house experts (31%), art advisors (30%), artists (29%), and dealers (27%). Digital research is being used more often, according to the Art Basel/UBS data, with 58% of respondents using digital resources for advice, led by online publications and press (27%) and apps or AI tools (22%, up from just 4% in 2024). And despite Noe's comments, social media is becoming more influential: 32% of collectors cited either Instagram or X/Twitter as sources of advice, according to the Art Basel/UBS report. While most experts emphasize in-person research and interaction as critical to the collecting process, collectors surveyed in the Art Basel/UBS report were broadly positive about AI's role in finding and buying art, with 67% saying AI made a positive impact on artist and artwork discoverability; 66% citing it for personalized advice and recommendations; 65% on provenance and authenticity verification; and 64% on pricing and valuation analysis. "The biggest mistake investor collectors make," according to Prendergast, "is their belief that 'I just know this is great art.' You don't. You cannot evaluate a piece of art without knowing what came before. The art market is also very professionalized in that a good MFA can often copy pretty much anything. So just because something looks nice does not mean it's of much monetary value," he said. When it comes to properly researching art, there is no replacement for getting out into the world. "Get a double espresso in a nice gallery, stay for a glass of red wine, meet the artists, participate," Kräussl said. "Buy your first piece, risk it, and you will have something interesting to say at the next dinner." Kräussl says he concludes all of his art-finance presentations and seminars with the same piece of advice that he would give to a dinner party guest: "'Buy what you like!' After all, they may have to live with it for the rest of their life," he said.