By Nicole Edwards
Gannett News Service

With the stock market taking a toll, some of us are tempted to find other places to put our money. If art is one of them, it should be done with great care, warn experts.

There are several factors that determine why certain works of art may or may not garner millions of dollars and even more art experts who say there are risks when it comes to viewing art as an investment.

Purchasing art should first and foremost be for pleasure, not profit, they agree.

"The idea of buying art as an investment is very risky because there is a lot of art out there," says James Mundy, director at The Frances Lehman Loeb Art Center at Vassar College in Poughkeepsie, N.Y.

"It's a world where anyone can be an artist. No longer is there a guild that allows 20 artists for one city. It's very difficult to find the very, very best artist these days. It's probably as difficult to become a successful artist as it is a major league baseball player. People should buy art, but they should buy it because they love it and if they do they can't lose anything."

Gilbert Edelson, administrative vice president and counsel at the Art Dealers Association of American in Manhattan, says less than 1 percent of all art made this year will appreciate in value. So, an old picture stashed away in the closet that cost $5 years ago will most likely be worth $5 100 years from now. Even the celebrated Pablo Picasso created "C and D" quality prints that Edelson says most likely won't appreciate.

"Most people who invest in art and don't know anything about art lose money," Edelson says. "It's about aesthetic judgments. Most people who have made money over the years, they haven't bought art as an investment.

"Those people frequently do not cash in, they donate to museums. More than 80 percent of what is in museums today come from donations. Most museums do not have a great amount of money to buy works of art. They rely on private collectors."

"It can be very fickle, particularly when it comes to contemporary art," Mundy says. "Old Master art tends to hold its value because it's had time to define its historical value. In the case of contemporary art, so much of it is based on a fashion and artists tend to rise and fall very quickly."

According to a recent ARTnews magazine article about the world's top collectors, one observer of the rich was quoted that "in any given year, there are at least five people spending at least $100 million a year on art."

This could be, in part, due to a growing interest in spending more on pleasurable items, confidence in artists or the market.

"I'm personally selling to Wall Street attorneys and people who are savvy about investments," says A. Dennis Gatto, owner of A.D. Gallery Fine Art in Rhinebeck, N.Y., and a member of the Appraisers Association of America. "People are trying to put their money into something tangible. It seems they are trying to diversify these assets."

Professional artist, art consultant and curator Elisa Pritzker of Highland, N.Y., agrees with the majority: the intention of an artist is not to create for someone else to make money. She compares the career of an artist to a Hollywood actor. Some high-profile actors earn $15 to $20 million for a single film and some artists earn millions for one painting.

Other actors - and artists - make a living doing what they love.

"You don't have to be as famous as the big names to make a living or have value," says Pritzker, who operates Casa del Arte New York and sells many of her paintings and mixed media work. "People know I have a serious commitment to the art. It's not a hobby. I make sure that people know what I'm doing and they know that I'm a serious artist no matter what."

Of course, she says, famous paintings by big-name artists of the past generally will increase in value because these are no longer creating new works. Each year, Pritzker says, the value of some of the work she has sold increases 5 to 15 percent.

"Ultimately, it's a question of supply and demand and whether or not you can ask for a higher price," Mundy says. "If the supply is limited, if Jasper Johns creates 10 paintings a year and they're perceived as being high quality, then you've got quality and scarcity working to push up the price. An artist who has produced more will not be able to demand the same price in the market."

Investing in art is only smart if you appreciate the pieces you're collecting, according to Gatto.

"If you're doing it simply as an investment, I might not recommend it unless you're an expert or you have the advice of an expert," Gatto says.

"Art is not meant to be an investment. There is plenty of proof to say if you buy the right paintings, they're going to go up in value, but there are no guarantees in it."