07 Apr Andy Warhol: A Safe Bet On Soup Cans
Almost everyone is aware of Andy Warhol and his impact on pop and postmodern art. From the multimedia shows of the Exploding Plastic Inevitable to Warhol’s iconic silkscreen depictions of Marilyn Monroe, there seemed to be no limits to Warhol’s experimentation and genius. Though he has been gone for over 30 years, Warhol’s art continues to inspire people to this day.
Warhol’s work is not just valuable to art critics and fans, either. As investors look for stable alternative assets to balance out their portfolios, more and more are turning to the art world for guidance. As one of the most successful artists of the modern era, Andy Warhol presents an intriguing opportunity for investors who possess the necessary capital.
This poses some important questions to those who want to invest in art, specifically the works of Andy Warhol. How much does it cost to invest in Andy Warhol? Does it make more fiscal sense to buy prints or original paintings? What kind of long-term returns can you expect with a Warhol painting? And most importantly, should you invest in Andy Warhol?
We will answer all of these questions and more, but first, let’s look at the real costs of investing in Andy Warhol’s art:
How much does it cost to invest in Andy Warhol?
The sales prices for Andy Warhol’s pieces vary widely based on consumer demand, the age of the piece, the original sales price, and a number of other factors. An original Warhol painting could cost anywhere from $600 to over $100 million. Prints are much cheaper than the originals their based on, though print prices also vary based on the total number of similar prints in circulation.
Let’s look at a few concrete examples to get a better idea of the initial costs you can expect:
Gun (Andy Warhol, 1981)
According to Masterworks, Andy Warhol’s 1981 painting, Gun, is currently valued at $10,245,000. However, if Gun were put up for auction today, it’s actual sale price might be lower or even significantly higher. Nonetheless, this gives you a general idea of how much a “blue-chip” Andy Warhol original might cost.
Cats Named Sam (Andy Warhol, 1987)
You don’t have to be a millionaire to invest in Andy Warhol. For example, one of Warhol’s paintings from the Cats Named Sam series is currently valued at just $7,500. As you can see, the amount you need to invest in an Andy Warhol original will depend on your particular tastes and budget.
Investing in Andy Warhol Prints
If you’re not ready to dive head-first into an art investment, you also have the option of purchasing an original, limited edition print. However, it’s important to note the distinction between original prints and reproductions. Reproductions are simply mass-produced copies with virtually no value to any art collector or investor. Alternatively, an original print is one of a limited number of reproductions that closely resembles the original artwork. In some cases, prints are not reproductions at all, but completely original works of art that are duplicated for sale.
The value and cost of a print are closely linked with the total number of prints put out in a given edition. Every print is marked with a fraction: the top number represents the number of that particular painting in the sequential order of reproductions, while the bottom number represents the total number of reproductions in the edition. Generally, the lower the numbers, the higher the value of the print.
So, what can you expect to pay for an Andy Warhol print? A high-quality print (also known as a Giclee print) of an Andy Warhol piece can start around $2,000 and go up from there. Again, it depends on the demand, the number of prints in the edition, and other factors in the art world at large. While prints are cheaper, they also don’t accrue as much value over time as original, one-of-a-kind paintings.
Now that you know what to expect on the front-end of your investment, it’s time to evaluate the long-term returns of an Andy Warhol painting.
What kind of long-term returns can you expect with a Warhol painting?
It’s important to remember that while art is more tangible than most other investment classes, it is also non-liquid. In other words, you won’t see any returns until you decide to sell. So, if you’re an impatient investor, art may not be the right avenue for you. However, if you’re willing to hold out, you can end up seeing huge returns with an Andy Warhol painting.
While the value of every Andy Warhol piece goes up and down based on popular demand, art, in general, accrues a lot of value over time. Since Andy Warhol was one of the most popular artists of the 20th Century, it stands to reason that investors would see particularly high investments with his paintings. But don’t take our word for it. Let’s look at a few examples with the sales price and current value (as of 2020) according to the Masterworks trading network:
Flowers (Andy Warhol, 1964)
We’ll begin with Flowers, one of many similar paintings based on an issue of Modern Photography that Warhol found particularly inspiring. This painting sold in 1992 for $46,200. In the 28 years since its sale, Flowers’ value has increased nearly 100-fold, to roughly $4,200,000. As modern art tends to increase in value over time, this number is likely to increase even more in the coming years.
Mao Tse Tung (Andy Warhol, 1972)
Warhol produced dozens of silkscreens portraying Chairman Mao Tse Tung in the early 1970s. The version pictured above sold at auction for just over $1 million in 2001. Fast forward 19 years and this Warhol masterpiece is now valued at $47,514,000. That’s an increase of 46x it’s original value!
Moon Explorer (Andy Warhol, 1983)
As previously stated, not all of Andy Warhol’s works require multi-million dollar investments. For example, Moon Explorer (pictured above) sold for $18,670 in 2015. Just 5 years later, it is already valued at $23,500, an increase of 1.26x its sales price. Given the short amount of time since its sale, the increase is relatively low compared to works that have had more time to accrue value. This is why most art critics and experts recommend sitting on your art investment for at least 10 years (or much longer) before you decide to sell.
Should You Invest in Andy Warhol?
Despite the common misconception that art is a risky alternative asset, it is actually one of the most stable and continuously lucrative investments you can make. While paintings and other works of art do not return regular dividends or accrue compound interest, they also don’t react to the ebb and flow of traditional financial markets. This means that art is virtually recession-proof, making it one of the safest and smartest ways to diversify your portfolio.
While this may tell you why you should invest in art, it doesn’t tell you why you should invest in Andy Warhol specifically. The truth is that Andy Warhol created thousands of art pieces with a wide range of prices and values. This means that, while Warhol’s paintings tend to be expensive, they are not completely inaccessible to investors who are short on cash.
Surprisingly, the accessibility of Warhol paintings has not diminished their value. In fact, Warhol’s pieces are some of the most valuable pop art paintings in the world, as well as some of the most valuable paintings from any art movement or period. Additionally, since the majority of his paintings were created within the last 50 years, they still have plenty of time to age and accrue higher values in the future.
In short, if you have the capital to invest in an original Andy Warhol or limited edition Warhol print, it could be an extremely lucrative addition to your portfolio. On average, art appreciates in value by approximately 3.97% per year, with “blue-chip” pieces by big-name artists (like Warhol) appreciating at significantly higher rates, as illustrated in the examples above. Warhol paintings have proven to be some of the safest and most profitable investments in the art world. As an added bonus, you get to be the proud owner of a painting by one of the world’s most beloved artists!
That said, you should always proceed with caution when investing in art. When you invest in a piece from any artist, you will need to consider how much you can reasonably invest and how much risk you can take on for the long-term. You should never invest in art if you can’t afford to sit on a painting for at least 10 years. Most importantly, make sure that you’re acquiring an Andy Warhol painting from a reputable source so that you know you’re getting an authentic Warhol piece!
If you’d like to find out how you can invest in Andy Warhol and make art an alternative asset for your portfolio, contact us today!