How to invest in art?

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This material was recently published in the web magazine «Almanart» http://www.almanart.com/art-investissement.html


Buying paintings - a specification of our love of the arts, spiritual enrichment, but because it requires considerable financial sacrifices, we would like to see this acquisition has enriched us both in a literal sense. Art Market dizzily growing, and you would like to also participate in this growth, but ... not all too expensive? Cost effective it? It is too risky? What better to invest?

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luxury, art and sensuality ...

Is art a luxury, whether they obey the same laws? Sociological studies show that since 2000 the euro, the consumption of luxury goods and art can replace each other (the results of the study Artprice, 2003).

According to Andre Malraux's "Art - this is what remains when religion disappears", that is, art helps spiritually rise. Hence, the art-collecting rich and spiritually exalted elite. In our overly mediatizirovannoe time the actors of the art market are spreading this view, encouraging everyone to buy in the hope that it will allow him to belong to the elite. Perverse effect of this situation is the rampant inflation in prices for works of art, which, between us, sometimes do not bring a lot of spiritual elevation.

It is essential to remember that you buy a jewel, a sports car "Porsche" and now primarily to have fun!

Is it the case art? Let's see the numbers

Museums and a handful of billionaires can afford to be not very sensitive to developments in and enrich their collection in every situation, but novice shoppers, collecting more accessible works, must reflect on the financial side of things.

Large demand for art leads to an increase in the number of transactions and actors of this market (artists, dealers, vendors, customers), and all it entails a rise in prices. Bid for pleasure must necessarily be accompanied by a financial analysis of the proposed transaction, as if you had invested on the Stock Exchange.

What the figures tell us?

After 10 years of stagnation, and in 2003, the global index of art begins to rise. Before 2006, it grows at 15%per year, and in 2007 he literally takes off. In June 2003, the magazine «L'art aujourd'hui» (Art Today) published an article entitled "Double the capital for 5 years" ... This goal is achieved, and the end of 2007 works of art rushed to buy absolutely everything.

This means that the investor should be very careful as to admit: seeing such a chart, but not knowing what kind of product in question, a financial analyst scream it - the beginning of the speculative bubble!


Figure 1: Global index of quotations on the world market trades (Artprice)

Note that the stock market and oil crises usually does not affect the Olympian calm of the actors of the art market (with the exception of depression, 1992-1995. To replace the follies 1980.). The recent banking crisis in the U.S. had no effect on the behavior of buyers of art. Analysis of the «Journal des Arts» (Art Magazine) for September 2007 (№ 264) showed that the market of art does not communicate with Exchange and real estate market, but that finding should be treated with caution, since the volume of the art market of a billion times below .

Here again the need to distinguish between two categories of buyers: museums and a handful of billionaires, as we have said, may not respond to economic crises, but also upon the occurrence of a dark age buyers with more modest economic opportunities tend to sell their artwork, and quotes nepervostateynyh works falls . Only objects of the highest quality always find their buyers - which means that it is difficult to overestimate the importance of good selection of purchased works of art.

What to invest? Examples of positive and negative

First of all, you should remember well the schedule of the overall index (15%per year) to compare with the evolution of the artist, now that you are going to buy: if it exceeds the rise in the general market, it is great risk that its quotation is overstated.

But let's look at a few specific examples.

Chinese contemporary art
Average Quotation for 5 years has risen to 44, Chinese artists were exhibited in major galleries in France and FIACe.


Figure 2: Global index of contemporary Chinese art artists (Artprice)

And what about the Russian artists?
Most likely, soon, their situation will be like the Chinese. For example, since October 2007, they were shown in the halls of the «Maison rouge» (exhibition "Sots Art"), in Vyuittona, in «Pinacothèque» and in 2 galleries.

Indian art
Yes, prices are still affordable. It begins to rise, but so far that speculation has affected only a handful of "stars", such as Syubod Gupta (Subodh Gupta), whose works are from 40,000 to 150,000 euros, but you must act quickly.

But why look for artists so far - you should look to the French artists. According to American, German and even Italian painters, the French quotation clearly underestimated, but this situation is changing.


Figure 3: The index of the French lines "Free figuration» (Artprice)


Are there any genres, trends that are very successful, any engineering or technology, more interesting for investors?

We give a cautious response because it is difficult to explain why pre-2003 picture enjoyed such a resounding success, despite the fact that there has been no aggressive marketing. Today, invest in it - it is like doing acrobatics on a trapeze without a protective net, because with the 2003 quotation is not moving pictures. And when buyers realize what they are buying prints at the price of an original work, one might think that there would be some decline.

What about the new technologies?

This market is sharply rising and falling for no apparent reason. This behavior can be explained, firstly, a very small volume of transactions, and, secondly, the difficulty to enjoy your purchase: really, think about if you have enough space to fit the installation, if you can give it a decent store to it could look in 10 years?

Surprisingly, having the above-mentioned disadvantages for the investor, such works found buyers for the proposed prices (not less than 1000 euros slightest videos that exist in many copies). But if you find the perfect video in less than 1000 euros, buy without hesitation, provided that it has signed and there is no more than 8 and ekzamplyarov.


Figure 4: A global index of installations and video (Artprice)


Perhaps to anticipate market developments and an interest graffitizmom?

Not a bad idea, but do not hesitate, as if to 2006, nobody was interested in them, but now its index rose like a rocket. While the number of artists with a quotation small, but at the door of specialized galleries, going to turn buyers.

Figure 5: Global index graffitizma (Artprice)