Art as an Investment
Synopsis
By Kiera Xinyue Huang
In this article, we demonstrate that art could be an important asset class in many respects, worthy of addition to the long-term investment portfolios of individuals and institutions.
Today, capital markets are unstable; people lose their confidence in financial investments. Investing in art represents an alternative to the recovery of financial funds and brings also other benefits (e.g. aesthetic experience, the pleasure of art).
In recent years, investment in art has become a worldwide trend with more and more people beginning to perceive art as an investment. But it also has specific features, particularly in the sphere of marketing mix.
From the whole range of arts, we focused on investments in the visual arts; we have identified the level of investment in this commodity, factors determining this area, and specifics of marketing concerning the art trade.
The present paper examines risk, return and the prospects for portfolio diversification among major painting and financial markets over the period 1976–2001. The art markets examined are Contemporary Masters, French Impressionists, Modern European, 19th Century European, Old Masters, Surrealists, 20th Century English and Modern US paintings.
