An Interview with Dr. Karl Schweizer
Managing Director, Head of Art Banking and Numismatics, UBS

As an investment, fine art is flying high. Anecdotal evidence suggests that some parts of the art market turned better profits than the Standard & Poor’s 500 last year. What’s more, unlike a stock certificate, you can hang a painting above the mantel and enjoy it for decades to come.

That is exactly what a collector should do, says Karl Schweizer, Head of Art Banking for UBS in Basel, Switzerland, where he manages a team of twelve. Schweizer maintains that art is best approached as a long-term investment — as in lifelong.

“If you try to turn artwork around quickly, you will usually lose money,” he says. “The driver in art buying should be the emotional dividend, which is what you get out of the piece every day.”

A desire to start buying art is often triggered by life events, Schweizer observes, such as selling a business, inheriting money, or buying and decorating a new home. “It can be the VP who has earned a good salary and saved his money or someone who loves art and wants to do something on a small level,” he says.

Having a fortune to invest expands your options but is not a requirement. Schweizer estimates that nearly a quarter of art sales fall between $10,000 and $100,000, and plenty of collections start with less than $10,000. “If you buy contemporary drawings or contemporary prints, for example, you don’t need a lot of money,” Schweizer says. “A lot of buyers are starting good collections with modest incomes. No matter what you have to spend, the process is the same.”

Schweizer advises clients to choose a theme. Down the road, a cohesive collection is usually more valuable than the sum of its parts. “If you sell the body of work in its entirety, you will probably get a better price.”

He also recommends that collectors “build a collection around motifs or expressions, specific periods or individual artists. People come to me and say they want to buy only Andy Warhol or works from Picasso’s Rose Period,” Schweizer says. “It always starts with an individual work that moves the buyer. A collection reveals the collector’s personality and philosophy. It’s a way to leave your mark.”

Collectors should educate themselves and look at as much art as possible, says Schweizer. He estimates he has seen a million works of art in his life, which serve as an excellent reference. But he is also an attorney and a banker and makes certain clients receive advice from various experts in their collecting field. “To bring some structure and guidance to the purchasing process, we’ve identified three key stages for our clients,” he says.

First, Schweizer says, “you must fall in love with the art. If you feel strong emotion when you look at it, you are on the right track. It has to be a good fit for you, before any other consideration.”

The next stage is to make sure the piece is original and has good provenance. “Most importantly, you should determine if it is interesting and historically relevant. You must weigh the significance of the piece,” he says. “For this, you need advice from experts in art history. They must answer the question: Is this piece truly innovative or merely an adaptation of something done before?”

The most common mistake of new art collectors? “To buy something that looks important but isn’t,” he says. “I see this at art fairs all the time. You can find a lot of contemporary artists doing interesting work but it is irrelevant because it has been done already. Faces painted in the Cubist style today may be well-done but they are not important because Picasso did that around 1910.”

For the third and final stage before buying, Schweizer advises collectors to imagine the work in 15 or 20 years. “You must ask yourself: Will this still be relevant? Will it have the same emotionality and effect that it has now? If you cannot definitively say ‘yes’ to those questions, you should think carefully about whether the work makes a profound and universal statement or is merely a flash in time. Those are big questions, but they are important to consider because the answers will affect the value of a piece over the long term.”

Cathleen McCarthy is a regular contributor to Art & Antiques. Her articles have appeared in American Artist, The Washington Post, Hemispheres and Continental magazines.