“Christie’s Launches Venture-Capital Arm Focused on Tech in Art” ~ WSJ.
“Governments are using culture to spur economic regeneration” ~ The Economist
“Liv-ex 100 and Liv-ex 50 both dip for the first time in more than two years” ~ FT
Over past few months, these headlines have been making the rounds all over. They’re all focused on investments in arts and fine wine, indicating a strong trend. So, let’s roll up our sleeves and dive deeper to see what’s truly going on. Our next piece would be on wine as an investment option, so please stay tuned!
For investment purposes, art can be divided into two broad categories:
Contemporary Art spans 20th and 21st century styles like digital, Earth, installation, and more. Linked to current artistic discourse, it offers high returns with artist recognition.
Modern Art covers late 19th century to the 1960s, including Impressionism, Cubism, Surrealism, and Abstract Expressionism. It holds historical significance, attracting collectors and investors with recognized artists and historical value.
Things to consider before making an investment in art:
Original Artwork stands out as a valuable piece with great investment potential. Renowned artists like Andy Warhol and Pablo Picasso exemplify its worth.
Printed Artwork signifies a rare edition of a costly piece. Among various copies, it closely resembles the original, often commanding a premium price and ensuring a promising ROI.
Benefits of investing in art: –
Asset class like fine art helps diversify your investment portfolio, it minimizes the risk of loss since it has low correlation to traditional assets and also acts as a hedge against inflation.
The blue-chip art market is not impacted by economic instability. Therefore, art prices usually show steady growth when there is an economic crisis.
While art offers numerous advantages, it might not consistently yield high profits. Artist selection can be challenging. Art’s illiquidity and additional costs, such as sales tax, transportation, and insurance, are factors to consider. Maintenance is essential, collectors must regularly upkeep or restore artworks to preserve their value.