DOES IT PAY TO INVEST IN ART?


In a Dutch Magazine (FEM), Edin Mujagic reported on the question of whether or Art is a smart investment. It is reported that on average the ROI of investments in art are below those of stocks and bonds. Investment in art is presented as fad, a hype that comes and goes, with markets being flooded by funds that invest in art, advisers on investment in art and self-help books. Millions of dollars are paid for paintings of famous painters and those that would have invested in art in 2006 would have had a higher ROI on their art than those that had invested in art.

As in wine, you have bad years, good years an exceptional years and apparently 2006 was an exceptional year according to a professor and his promovenus at the University of Tilburg in the Netherlands who concluded that art investments often have a lower ROI than ios commonly thought. Based on the details of 1.1 million sales they come to an average yearly ROI of 4.01%. 1982 was apparently a turning point where the ROI went below that of stocks and bonds. At the same time there were exceptions especially the period of 2002-2007 (11.6% on average) and the late eighties.
Similar as sock and bonds, it does make a difference what you invest your money in. Oil paintings. especially city scenes and self portraits score high, drawings and prints are at the bottom end of the ladder.

Now it may be me, but could it maybe be that art investments follow the general patterns. When there is money around, a surplus even, you can just give an art investment a go without any expertise. The need for expertise, is in periods like this where if you consider investments in art you will need to know what you are doing if you expect it to provide you a return on investment. That is not any different than on the financial market where a number of advisers end up left puzzled and others have a knack of knowing which ones will do great despite the general trends. Investing simply requires expertise and perhaps some patience.

I see business experts claim that this crisis requires the creatives to turn it around, and people that can anticipate results for the mid to longer term. Perhaps investing will turn back to something more of a personal commitment again. I am far from an expert in that field, but  could imagine that this is perhaps a good time to engage someone that understands or has a feel of what YOUNG and UPCOMING artists and works will be hot in the mid to longer term. Something that requires an in depth understanding of both art and its future markets.

At the same time I still find it a strange idea. To me art is something that’s very hard to put a price on, I see millions go for paintings I would not pay a dollar for, but then again, I am not know to be an investment specialist, let alone an art investment specialist. For some reason I have more sympathy for those people you see on those television programs that bought a work of art just because they loved what they were looking at and years down the line they find out they need to call their insurance company because they ended up buying a very special work of art.

Duh that’s why they bought it in the first place; BECAUSE IT WAS SPECIAL,TO THEM. Come to think of that, if all who could afford it, would end up buying with their heart, how many new artists would there be identified as important, upcoming and brilliant? But if you are in the art game for the money, by all means forget what  just said.

I still find it all a hard thing to imagine: here you are painting of $100,000 on the wall, another $25,000 in security and insurance. You friends come along and say wow! And you saying well I hate the painting but it was the best investment the market had on offer. I think when it comes to art and I have the spare money, I’d stick to my heart, who’d wanna look at something he doesn’t like everyday anyway. I will probably never be a smart investor in financial terms. At the same time I think that a smile on my face because I am enjoying a work of art so much is more than money could ever pay for.  Personally, I find a beautiful painting or picture ( to my taste) a fantastic source of ideas or inspiration. Perhaps as an entrepreneur, business owner or employer: what if this work of art inspires so much it brings you or one of your staff members that  one idea that’s worth a million. Now for that let’s say $25,000 and some time you allow for to dream away you may well end up having made the best investment you ever made (of course together with the staff member that came up with the golden idea. Buy that guy an office filled with paintings to his liking!!!!)

The paintings in this blog post are from two artists I really appreciate:

I suggest you go and have a look on their websites or if you are around, perhaps see and exhibition. Nothing beats the real thing of course. And if you are curious about that revolutionary new artist behind the photo at the top of the article; from a confidential source I have heard that that picture was taken with a mobile phone. The artist has a profile here >>> and his gallery  can be found here >>>.  He may well end up being that mid to long term high yield investment you were looking for hahahahahaha. And should you end up feeling defrauded because you find out the picture you bought was taken with a mobile phone; he investigates fraud as well.

Reblog this post [with Zemanta]

2 thoughts on “DOES IT PAY TO INVEST IN ART?

  1. Pingback: Roundup « John Dierckx

  2. Pingback: Twitter Trackbacks for DOES IT PAY TO INVEST IN ART? « John Dierckx [johndierckx.wordpress.com] on Topsy.com

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s