The average art investor is not as wealthy-as one might think. How many people do you know, are able to run out and purchase a Pablo Picasso original? I do not know anyone who has even seen an original Pablo Picasso, let alone owns one. No, the average art investor is just like me, the average person; a regular hard worker looking for ways to invest money and retire well. When I say “retire well” I mean having the ability to keep doing all the things you love to do in life, even continue working … if that's what floats your boat. I plan on napping … a lot … when I retire! I digress. Back to art investment. What the average person like myself wants to know; is Art worth investing in? The short answer; YES! I know this because? Well, because we spend on average $ 22 billion dollars per year world-wide collecting the stuff. I would say, that's a worthy obsession. You do not have to buy those crazy expensive masterpieces painted by our dear friend Leonardo Da Vinci either, in effort to participate in the world of art investment. Although, I could handle a Monet hanging in my bathroom. Who could not, I mean it's breath-taking art right? However, back to reality; like me, you just need the right information to get started.
Statistically speaking, the best performing segments of the market over the last 50 or 60 years have been after the 1950's with Modern Art & Impressionism leading the way. I know, I know, you like the Contemporary Art circles, and I do too BUT, you have to be careful. Contemporary Art is by far the most volatile art market to invest in, with it's unpredictable swings in price. However, if you love the image, and it's a Limited Edition or an Original, you probably will see a return on your money in the long run. And hey, no one said you could not invest in your kids future right? Now, back to the artists. (in my opinion our most valuable resource) Hey, I think I heard you scoff !? If you do not believe me, look what's hanging on the walls of some of the finest five star hotel lobbies, or the walls of five star restaurants, and even the offices of important downtown city buildings; it's typically original works of art from local artists. Interior Designer's know their stuff! The fact is, corporations invest in art, but only the artist who sold their own works are bragging about it. Do I smell an investment secret? A perfect example is, the cruise ship industry. Every hallway, every restaurant, and decked-out foyer of each massive ship is adorned with original artwork, photography & sculpture. Why? Because art screams class, it screams culture and make-no-mistake-about-it, art is luxury. I do not know about you, but I love luxury, and basically that is why I need to be extra smart with my money. Remember that nap I mentioned earlier? I plan on taking plenty of them when I set sail to the Bahamas later in life.
Did you know, that over the last 150 years or so, art as an investment, has out-performed bonds, and has produced returns essentially the same as the famous S & P 500! Ya! I know, that's about 10% compounded annually. Do I have your attention yet? Now listen to this, Original Art today is actually affordable! Yes, my friend! And historically, lower priced art generally out-performances higher priced art; there is something for every budget, including mine. As long as I invest in Limited Editions or Originals, it is estimated my investment will grow in value over time. So, here is the big question; How much should a person invest in art? Well, I can not tell you how much of your money you should spend but, I will tell you this; the average art investor invests 10% of their net worth in arts. Really? Really? Would you be freaking out right now if I had said the average stock market investor invests more than 10% of their net worth in stocks? Probably not. Again why? Because, many people believe the stock market is a more secure investment than art. Not so. What you do not know is, that investors' view art investment the same way they view investing in gold. A safe bet. After the stock market crash in the 1920's, after 9/11 and the crash again in 2008-2010, art investment went up substantively, along with gold investments. It's weird how portfolio managers' do not mention that little tid-bit. Investors' see art as a tangible, hard asset, that can perform well in inflationary conditions and can hedge against currency risks. That means; Art is considered to be a safe place to put money when world events seem sketchy. Makes “Cents” to me.
I read somewhere, that in May 2010, a painting by Pablo Picasso sold for 106.5 million dollars, becoming the most expensive work of art ever sold at auction. Surpassing the previous record set in February 2010 of a bronze statue by Swiss artist Alberto Giacometti, which sold for 104.3 million dollars. Now do not let that scare you my friends; Maud Lewis (1903-1970) Nova Scotia, was selling her original folk art paintings from the side of the road for $ 3 to $ 5 a piece. Did not I mention art for every budget? I do not think you can find any of Maud's original artwork for less than $ 50,000 to $ 100,000 in today's market. I would say, that's a fun stable investment arena, that more people should be talking about.
By Gina Kling
2012 Copyright Gina Kling, All rights reserved.