SERIES: PART 3 – Thinking Of Investing In Art?
The global art market is booming, with last year’s sales reaching a record £37bn, a 7% year-on-year increase and a little above the 2007 high of £35bn, according to the most recent figures from the European Fine Art Foundation (TEFAF).
Like all investments you should never spend more than you can afford to lose. ENECAA advises its clients’ to start with emerging artists and markets. See my previous article Is this art any good? to read a brief discussion on why the world’s most famous artist are collected and command prices in their tens of millions.
Art has been emerging as a new asset class for the well-diversified portfolio. The reported returns are enough to catch anyone’s eye: the index of fine art sales, used by art advisors to sell art funds, shows an average annual return of 6.5 % over the past four decades according to Stanford Graduate School of Business who presented their research to the European Financial conference. Their findings reported that holding an art fund in a portfolio does not increase the chances that the portfolio will outperform. In short, their research concluded that paintings are primarily aesthetic investments.
Similarly art critic Brian Sewell argues “no one should buy works of art for investment” as art is for “pleasure and enlightenment”. But he did offer some advice for investors: “If you do buy art, buy what everyone else is buying. It is an entirely false market and one day it will implode, but at the moment it is fiercely profitable.” And it is here that companies such as ENECAA can help by working with emerging artists in Central Asia and more recently Southeast Asia. Should you wish to know who the hot ticket artists are then it is important to be connected to the art world eco-system and ideally work with established art advisors that have strong relationships with important the art world’s rising stars.
One of my top tips for artists that is worth a closer look are Timur Akhmedov and Dr Leyla Mahat whose works are featured in this article. Both artists meet the criteria for investors established by Swell. Not only do they give joy and an alternative view, but they are also relatively affordable and have been acquired by both private collectors and museums in Germany, Turkey and Japan.
Should you wish to know who the hot ticket artists are, then it is important to talk with established expert art advisors that have a proven track record of working alongside the art world’s rising stars.