4 Things To Know About Investing In Gold Art, According To Michael Teh Of Aureo Gallery
As glamorous as it sounds, investor Michael Teh's relationship with gold art has been a rollercoaster ride of emotions from the start. Teh is the founder of private investment firm Saged Assets and the co-founder of Aureo Gallery, the only art gallery in Southeast Asia to sell the famed 24K gold art paintings of South Korean artist Kim Il Tae.
Graduating among the top of his class in mechanical engineering at RMIT University, Teh's growing interest in the stock market led him to read up any resources he could find about investments, including the Australian Financial Review. After years of hard work, perseverance and a series of successful investments which yielded multibagger returns, Teh's investment portfolio grew considerably.
Around this time, Teh was heavily influenced by Jim Rickards' book, The Death Of Money: The Coming Collapse of the International Monetary System. Inspired to diversify a portion of his portfolio into fine art and gold rather than conventional paper assets like stocks and bonds, Teh's decision to invest in gold art was realised in November 2016 at a private banking event in KL, where the Kim's works were first displayed.
"I knew I was taking a lot of risks by co-founding Aureo Gallery and investing in gold art back then, as I had no prior experience in art investments nor in the business of art," shares Teh, who experienced a great deal of anxiety and stress when first opening the gallery. "Art collection and art investment in this region still aren't very widely understood today. Ultimately, it was my innate conviction towards Kim Il Tae’s gold art that gave me the boost I needed to commit to this venture."
Drawing from his unique experience as a fine art investor, Teh shares some pointers to know before investing in gold art.
Gold art versus paper assets
The more Teh read about events like the global financial crisis of 2009, the more convinced he became about investing in tangible assets like gold and fine art over "paper assets" like stocks and bonds.
"I thought to myself, given the behaviour of central banks printing paper money as a means of 'quantitative easing', there was a need to diversify a portion of my investment portfolio from paper assets to tangible assets, such as real estate, fine art and gold to preserve wealth and to avoid value destruction," says Teh, who admits that fine art investments aren't as popular here in Southeast Asia compared to countries like the US or UK.
"Given my investment background and my eye for portfolio diversification, I became very interested in gold art as an asset for wealth preservation and value appreciation."
The most valuable investments aren't always the most popular
So, what prompted Teh to invest in Kim's gold art at a time when few investors here saw its value and potential?
"In my experience, the stocks that gave me multibagger returns were often companies that went unnoticed by the market and yet possessed the potential to serve a need in the world, a good story, and value creation."
You're not investing in gold; you're investing in art
While it's hard not to overly focus on the gold aspect of this stellar art form, Teh cautions that buyers must understand that they are investing in art, not in gold.
"Many visitors who come to our gallery tend to ask how many grams of gold there are in each piece of art, and whether or not the prices and value of gold art are pegged with gold prices and so on. The value of gold art lies strongly in its fine art element, and its value can also be driven emotionally by art collectors. In that context, the price of gold art can end up being a lot more than the price of gold."
Considering the limited supply of gold art, the painstaking craftsmanship that it demands, and the fact that Kim is the only artist that the world knows of to produce gold art on a regular basis, Teh affirms that a distinction must be made between gold art investment and gold investment.
The return on investment is more long term than immediate
"Many investors who want a quick return of their investment try to find ways and channels to monetise the value of gold art," shares Teh. "I often tell people that gold art is a living consciousness. One must realise that its potential does not lie only in its monetary value, but also in its emotional value. Many people who only focus on the monetary value of gold art may not be able to extract its full potential."
Whether this gold art takes the form of a family heirloom passed on from one generation to the next or as a catalyst for spiritual awakening—as in the case of Teh—it is an investment whose true worth is revealed in the passing of time.
"I've invested in gold art since 2016. Not only have I gained some returns financially, but I've always experienced a tremendous growth in spirituality since embarking on this journey. I could never put a price or value on these returns."
How do you balance between your roles as an investor, an entrepreneur and most recently, a yoga instructor?
This year, I became a qualified yoga teacher to teach yoga practices, meditation, self-realisation, and wellness. In 2018, I discovered the power of meditation and self-realisation which have shaped my life significantly. I realised that one’s true potential is infinite by nature and the purpose of one’s life is to realise this potential and to express it creatively. I’ve been meditating at least an hour or two daily since then. The practice had markedly improved my inner strength, focus and peace.
What books are you reading right now?
I am currently reading The Autobiography of a Yogi by Paramahansa Yogananda. I've also completed a few books this year, including Living with the Himalayan Master by Swami Rama and Yoga Sutras by Sage Patanjali.
If you had to convince someone about the benefits of investing in gold art in just one sentence, what would it be?
'Not just gold, but art'. One should invest in gold art not only because of its monetary value but because it is a highly desirable asset which can be passed on to your children and generations after.