Category Archives: investing in art

Investment in classic cars and Fine Art drops as photography rises

Investment in the arts is always a tricky thing.  Artists and styles come and go out of fashion.  What is soaring today in value can drop like a stone tomorrow.  There is no rhyme or reason to it apart from the fickle nature of the buying public.

Blue chip pictures like a Picasso or Rembrandt will always hold their value and these works seem to have no limit.  However, we are talking about major artists and works of art in the high millions and that excludes most but the very rich.

Investment in Fine Art declining

The recession has played a major part in investment in the arts declining over the last few years.  This has been particularly noticeable in the middle market where investors have felt the “squeeze” on their income.

Fine Art has fallen out of favour as an investment by the very rich and prices are down over 6% from last year.  Modern Art has faired no better with modern and impressionist art selling for 12% less than at its peak in in 2007.  Old masters and 19th century are even worse with prices down a staggering 40% at auction to where they were before the financial crisis.

Classic car investment ~ Aston Martin DB5
Classic car investment ~ Aston Martin DB5
classic car investment ~ Shelby Cobra 289
classic car investment ~ Shelby Cobra 289

In other markets, investors have moved away from classic cars which for years have seen extremely strong growth.  In 2016, prices have tumbled.  The same goes for antique rugs and carpets which in 2016 hit a 11 year low.

Investment in musical instruments and photography rising

Interestingly, items that have increased in value during 2016 are rare musical instruments which have seen their value rise by over 16% compared to 2015. The highest percentage however, has been photography which has become probably the fastest growing and popular investment during 2016.

This is probably not surprising when you consider the price starting point is much lower than Fine Art.  In a period where investors are looking for value, photography is seen as an undervalued sector and hence the sharp rise.

A time for investing

This is a good time to be investing in Fine Art.  The market is depressed and markets are lower than they have been for some considerable time.  There are many sectors of the Fine Art market that are now undervalued.  There is no doubt that when the market picks up, these sectors will grow rapidly as investors realise the potential in these markets.

Investing in Art should be looked upon as a medium to long term investment.  If you are a person looking for instant rewards, I would suggest this market is not for you.  However, for those that take a longer term view, the rewards can be quite staggering.  What can be more rewarding than enjoying a piece of art in your home, knowing that it is increasing in value.  It certainly has this advantage ove the Stock or Forex market!

 

A Guide in How to Invest in the Art Market Sensibly

Investing in the Art Market can be lucrative but like with all investments, there is risk involved.  This guide in how to invest in the Art Market is to help you make informed choices.

As small investors, we are probably not in the league of buying a Picasso or Monet.  However, there are still good investments to be made with lesser known and up and coming artists.  The secret is picking the right ones.

What should I Invest in?

I think to begin with we need to have an idea of what is selling and which markets are the most active at this time.  One of the ways to do this is to look at the main auction houses to give us a clue.  A recent study of paintings sold at Christie’s and Sotheby’s discovered that Impressionist and modern art accounted for about 30% of total sales.  25% was represented by 19th century paintings.  Post-War and Contemporary was 16% and lagging behind at 5% were Old Masters.

Henri Hayden ~ Browse & Darby
Henri Hayden ~ Browse & Darby

If we compare the results from the auction houses with the Mei Moses Art indexes ( widely recognized as the pre-eminent measure of the state of the art market) we will get an idea of what will give us the best return.  Researching the Mei Moses index we find that the Post-War Contemporary Index out performs the World Impressionist Modern Index by some margin.  This is especially true over the last 10 years.  Another index, The Art 100 indices also backs up these findings.

This gives us an idea of where the market is at this time.  However, we must remember that things can change.  What is popular now can very quickly become out of favour.  Therefore it is important to keep an eye on trends.

Continue reading A Guide in How to Invest in the Art Market Sensibly