Marrying his lifelong interests in art, business and collecting, Doug Woodham has released his first book, Art Collecting Today: Market Insights for Everyone Passionate About Art, which aims to demystify the art market.

A trained economist with a PhD from the University of Michigan, Woodham served as president of the Americas for Christie’s and earlier in his career was a partner with McKinsey & Company, working with asset and wealth management firms. He presently sits on the board of the arts venture Twyla and advises other collectors.

How did you get started in the art world?

I grew up in a middle-class family in Toledo, Ohio, that had little interest in art. When I was in high school, however, my girlfriend’s father opened an art gallery in town focused on prints. He explained to me the different techniques artists use to create prints and showed me my first Picasso. The experience was fascinating and made me start questioning further. Why was a Picasso print so valuable? Why did the gallery source everything from New York? Who were the younger artists with a shot at being the Picasso of my generation?

What do you collect today?

My wife and I collect drawings by artists who came to prominence in the 1960s and 1970s. The collection is focused on artists associated with Minimalism and Conceptualism, such as Sol LeWitt, Frank Stella, Fred Sandback, Mel Bochner and Robert Morris. We also collect work by Alice Neel, Ruth Asawa and Claes Oldenburg, three artists we particularly admire.

Give us a snapshot of what the global art market looks like now. Who’s driving it, who’s buying and where is it headed?

Art is the ultimate discretionary purchase made by those who have the means and desire to own precious objects. The number of people with the means to acquire art has increased sharply, as has the subset that desires it. Close to 34 million people around the world now have a net worth of at least $1 million, up from approximately 14 million in 2000. But means alone does not make an art collector. Three factors are behind the increased desirability of art: education, exclusivity and opportunity cost. I talk more about these sources of demand in Chapter 2 of my book.

Is it getting bigger or smaller?

Demand for artworks by Twentieth and Twenty-First Century artists is likely to remain strong for the foreseeable future. But as a discretionary purchase, collectors can easily elect to defer buying something. Likewise, discretionary sellers can decide to postpone selling work if they feel there may be a lull in buyer demand. Speculators eager to participate in the market when it is on an upswing can just as easily elect to sit out when there is market uncertainty. Taken together, this can lead to sharp short-term changes in art market sales volume, like we saw in 2016.

What prompted you to write this book?

The art market is often opaque and confusing to even the most experienced collectors. I want my readers – whether a seasoned collector, an uninitiated newcomer or an art world insider – to learn how the art marketplace works in practice and how to navigate it smartly. My hope is that those who may have been put off by art world practices will finally feel they have the knowledge needed to participate freely and fully, and collectors will be able to pursue their passion with more confidence.

Tell us about one of the most interesting art world cases you researched for your book.

Siblings who sold a $10 million art collection they inherited from their parents shared with me every document, note and discussion they had with three auction houses who were competing to sell the collection in 2015. In Chapter 6 of my book, I include a case study (suitably disguised) detailing how the siblings evaluated the competing auction house financial deals and marketing plans. It is a vivid story of ruthless competition at the top end of the art market.

Can you share a few insights into art collecting today?

There is joy and excitement associated with buying a work of art, bringing it home and sharing it with friends and family. Because buyers can sometimes be blinded by passion, it is important to understand how the marketplace evaluates different artists and puts a price on their artwork. In Chapter 4, I share a framework for doing this, including highlighting differences in how the marketplace treats deceased versus living artists. I use case studies of how the marketplace works for important artists such as Christopher Wool, Amedeo Modigliani, Yayoi Kusama and Rene Magritte to bring the framework alive.

For veteran art collectors, what’s the most important takeaway from your book?

As the price of art soars, the schemes and shenanigans of those who prey on collectors have grown bolder and more nefarious. Throughout the book, I share case studies of collectors being duped along with practical steps they can take to protect themselves. Examples include formalizing a fiduciary relationship with art advisors and being on the lookout for undisclosed introductory commissions.

What’s next for you?

I work with a select group of collectors and corporations providing them with business strategy and financial advice related to art and culture. From working with a collector to create a legacy plan for their extraordinarily valuable art collection to helping a company use art and culture to build stronger brands and products, I draw on my lifetime of personal and professional experiences in the worlds of art, business and finance.

-Andrea Valluzzo